The Fed finally cut interest rates. Here’s what comes next.

But first, the time has come.

If this was forwarded to you, sign up here.

The big story

Finally

Go big or go home.

The Federal Reserve didn’t hold back when it cut interest rates for the first time in more than four years.

The central bank announced a jumbo cut of 50 basis points, ending its ongoing battle against post-pandemic inflation and giving investors exactly what they wanted.

While the cut was never in question, its size was widely debated heading into Wednesday’s announcement. The speculation was that opting for the larger cut might indicate the Fed is worried about the economy. (The worse things are, the more relief is needed, the thinking goes.)

Fed Chair Jerome Powell threw cold water on those concerns. In a press conference after the announcement, Powell said he believes the economy is moving in the right direction.

But don’t get used to jumbo cuts, as Powell said Wednesday’s 50-point reduction doesn’t guarantee the central bank will maintain that pace going forward.

So what does this rate cut mean for … everything?

First off, don’t expect any immediate changes. It’ll take a while before the effects of the cut reach the rest of us.

But that doesn’t mean you can’t plan ahead. Our colleagues at Personal Finance Insider have covered the eventual impacts the rate cut will have on various financial products.

Let’s start with mortgage rates, since that’s an area people naturally think of when it comes to interest rates. Bad news, prospective homebuyers: Don’t expect mortgage rates to drop much in response to the Fed’s announcement, as the market has already priced in the reduction.

And if you’re locked into a high mortgage rate, maybe hold off on refinancing until a few more cuts materialize.

Another key consideration is where to park your cash. The cut means the rates banks offer for their savings accounts will likely go down eventually.

As a result, you might want to consider investing some of the cash you may have sitting on the sidelines in high-yield savings and money market accounts.

But experts emphasized it’s important not to panic regarding your investments. Instead, use the new rate as a chance to reevaluate your investment strategy. That could include further diversifying your investments or even diving back into bonds.

The rate reduction also won’t be enough to significantly lower high-interest credit card debt. Instead, you’ll still have to do it the hard way: Consolidating debt and prioritizing just paying it off.

News brief

Top headlines

3 things in markets

1. From Google to Goldman, this engineer wants to streamline investment banking and trading with tech. Melissa Goldman is set to join Goldman Sachs as its global head of engineering for the global banking and markets unit. Goldman, who previously led core engineering at Google, spoke to BI about her plans for the new role.
2. Steven Cohen is hanging up his Terminal. The hedge fund billionaire and New York Mets owner will no longer trade for the $35 billion Point72. Instead, he’s focusing on developing talent at the fund.
3. One billionaire isn’t cheering the rate cut. Jeff Gundlach, the “Bond King,” said interest rates should have been lowered a lot sooner. The DoubleLine CEO said the economy has already slowed to recessionary levels, and the Fed is “way behind the curve.”

3 things in tech

1. The internet has a bot infestation. You can thank OpenAI and Anthropic for that. Bots built by AI companies are prowling the internet to scrape web data for training. They’re causing disruptions and crippling traffic, and could make site owners’ bills skyrocket.
2. YouTube just announced new AI features for creators. The tools could make life easier for creators by helping curate video ideas, titles, and thumbnails. But the platform’s push into artificial intelligence could pose a risk to creators’ authenticity and connections with fans. YouTube’s chief product officer spoke with BI about AI’s future on the platform.
3. America is ready to go all-in on AI infrastructure. To maintain its edge in the generative-AI race — and become less dependent on places like Taiwan — the US is making significant investments in data centers and chip production. A $30 billion mega fund from BlackRock and Microsoft will boost those investments.

3 things in business

1. The science behind “eldest daughter syndrome.” The results are in: First-born daughters really do have it the hardest. That’s thanks to the responsibilities they’re often tasked with in their families. Their existence brings real benefits to their parents and siblings — but it’s not clear whether big sisters themselves share in those rewards.
2. The Alexander brothers acted like they could “do whatever they wanted.” In the past three months, more than a dozen women have said they were raped or assaulted by Oren, Alon, and Tal Alexander, whose family made a fortune in real estate and private security. Concerns about their behavior stretch back decades.
3. MrBeast’s drama just hit the fan. The YouTuber is facing a class-action lawsuit alleging sexual harassment and dangerous on-set conditions by contestants on “Beast Games,” his reality show. Amazon, which partnered with the creator to produce the series, was also named a defendant.

What’s happening today

• Treasury Secretary Janet Yellen speaks at The Atlantic Festival in Washington, DC.
• Colin Farrell stars in “The Penguin” on HBO, a spin-off series from the 2022 film “The Batman.”

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Hallam Bullock, senior editor, in London. Milan Sehmbi, fellow, in London. Amanda Yen, fellow, in New York.