Federal Reserve reduces rates, anticipating better growth conditions in 2026

COLUMBUS, Ohio (WCMH) -- For the first time in 2025, the Federal Reserve made an interest rate reduction last week.

It's a quarter percent cut, and the Fed has indicated more cuts before the end of this year.

Ben Ayers, Senior Economist at Nationwide, said the rate cut is good news for the job market, which has slowed in recent months.

He said it shows the Fed wants to give the economy a bit more support to ensure the labor market doesn't get any worse.

Ayers said the reduction lowers the cost of doing business.

"It's that cumulative aspect where many of these industries are really not adding workers that the Fed says, okay, we need to provide a little more help," said Ayers. "Find it a little bit easier for companies to expand and maybe add some workers. And they're starting to do that with the move they made last week."

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Ayers said the Fed is expected to cut rates twice more, totalling a three-quarter percent reduction.

"Three consecutive rate cuts here, you know, that's not a lot in the grand scheme of things from the Fed, but it certainly helps ease things off and hopefully set us up for some better growth conditions in 2026," said Ayers.

Joe Rosen, Senior Lending Advisor for Chase Bank in central Ohio, said the reductions are good for people wanting to purchase big-ticket items soon.

"It's going to make it more affordable for people to finance things," said Rosen. "If you want to buy a car, you know, interest rates being lower, it makes the monthly payments lower."

Even though the cut just happened last week, Rosen said local Chase Banks are seeing an increase in calls from customers asking how it could benefit them.

"People who have had loans out for a while now with more equity in their home, it's more attractive for them to be able to refinance their home, maybe consolidate some debt, some high-interest rate credit cards, or do that home improvement project or what have you," said Rosen.

It's unclear where exactly the economy could go from here, so Rosen said if you have the opportunity to get a lower monthly payment right now, think about taking advantage of that.