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On The Market

The Fed Finally Cuts Rates, but Will It Even Matter? w/NYT’s Jeanna Smialek

On The Market

BiggerPockets

Investing, News, Education, Business

4.8858 Ratings

🗓️ 26 September 2024

⏱️ 37 minutes

🧾️ Download transcript

Summary

The Fed’s recent rate cut signaled something clear about the US economy, but what are they trying to say? With a bolder rate cut than many of us expected, homebuyers, business owners, and real estate investors are seeing the light at the end of the high-rate tunnel, where borrowing money and buying houses could come at a lower cost. But with markets already anticipating a rate cut, did the recent cut even really matter? Today, Federal Reserve reporter from The New York Times, Jeanna Smialek, shares her thoughts on what the Fed move meant after studying them full-time for over a decade. Jeanna believes that the Fed feels confident, even if this recent rate cut was overdue. Inflation has seen a substantial dropoff, but on the other hand, unemployment is rising, and Americans are getting nervous. Did the Fed move fast enough? Jeanna also shares the future rate cuts we can expect from the Fed, with more potentially coming this year and a sizable series of cuts already lined up for 2025. How significant will the cuts be, and will they be enough to stop unemployment from getting out of control? How will rent prices and home prices move due to more rate cuts? We’re answering it all in this episode! In This Episode We Cover The Fed’s recent 0.50% rate cut explained and their forecast for 2025 rate cuts The signal the Fed is sending by making a bigger rate cut (and preparing for more to come) Why the Fed decided NOW was the time to finally cut rates (and whether it was too late) Inflation updates and good news for the slowing of growing prices Housing affordability and whether or not these rate cuts will help homebuyers/renters And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE  Find Investor-Friendly Lenders See Dave at BPCON2024 in Cancun! Dave's BiggerPockets Profile Federal Reserve Cuts Rates By 0.50%, a Bigger Cut Than Expected Read More from Jeanna Get Jeanna’s Book, Limitless: The Federal Reserve Takes on a New Age of Crisis Grab Dave’s Newest Book, “Start with Strategy” Jump to topic: 00:00 Intro 01:40 The Fed Makes a BIG Move 05:31 Why Now? 07:40 Effects of a 0.50% Rate Cut  12:16 Inflation Trends  15:07 Will Home and Rent Prices Rise?  22:42 2025 Rate Cuts 27:20 How the Fed Has Changed Check out more resources from this show on BiggerPockets.com and  https://www.biggerpockets.com/blog/on-the-market-255 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0

The Fed finally did it. Last week, the Federal Reserve went big, and they cut the baseline

0:07.0

interest rates, the federal funds rate, by half a percentage point. And most analysts expected

0:12.9

a rate cut. The Fed basically said that they were going to do that. And if you listen to this

0:16.9

show, you've probably heard us talking about this anxiously and eagerly for a couple of weeks

0:22.3

now. But last week's rate cut and the Fed meeting was full of new information and left me with a lot of

0:30.3

new questions. To help me answer those questions, I'm bringing on a professional Fed researcher and

0:36.9

reporter than New York Times, Gina Smilich,

0:39.9

to help us answer all the many questions I am sure we all have about where the Fed's going

0:45.6

and what's going to happen with interest rates.

0:52.7

Hey, everyone, welcome to On the Market. I'm Dave Meyer. And my guest today, Gina Smilich covers the Federal Reserve and the economy at the New York Times. She's been doing this for more than 11 years, so she really, really understands what's going on with the Federal Reserve. And today, she and I are going to get into

1:11.6

questions like, what does the rate cut tell us about how the Fed feels about the U.S.

1:16.8

economy and where they're trying to steer it? Are we finally out of the woods on inflation?

1:22.6

How long will these rate cuts take to hit the economy? And will average Americans actually feel these

1:28.7

rates in terms of the broader economy, the job market, or just in their wallets? Plus,

1:34.8

we're going to talk about a lot more. So let's bring on Gina. Gina, welcome to the podcast. Thanks for being here. Yeah, thanks for having me. Well, I to the podcast.

1:44.9

Thanks for being here.

1:46.0

Yeah, thanks for having me.

1:47.2

Well, I'm super excited to have this conversation, at least for people in our industry.

1:51.8

And who listened to this podcast, we have been talking about the Fed and potential rate cuts for so long.

1:57.9

And they've finally done it just as a recap at the most recent Fed meeting,

2:03.0

September 17th and 18th. The FOMC, the board of people who make these decisions, decided to

2:08.8

cut the baseline interest rate by half a percentage point. So let's just lay some groundwork here,

...

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