ATLANTA — Shannen Slaughter has high hopes. As a recruiter in the healthcare industry who’s lived in Cobb County for a few months now, she’s careful to notice what’s changed about Atlanta and her personal financial situation.
“The prices have definitely gone up,” Slaughter said. “That’s a given. Atlanta has always been overly populated. I will say the job market is a lot more competitive. Financially, I'm doing okay. I'm not living paycheck to paycheck, luckily. I'm blessed enough to have that little buffer a lot of people don't have."
Slaughter also runs a business called The Candle Bar. She said lately, the sweet smell of success has become more difficult to reach, because as the cost of living has gone up, her salary just hasn’t kept pace. She’s hesitant to take out more loans out of fear of being trapped in them for decades.
The Federal Reserve’s move to lower its standard interest rate by half a percentage point caught Tom Smith, an economics professor at Emory University’s Goizueta School of Business, by surprise. While he banked on the Fed lowering interest rates, he didn’t think the institution would decrease the rate so aggressively.
“It was a pretty bold move,” Smith said. "You're likely to see interest rates for homes, cars, business loans, home equity loans start to drop. Although they’re not directly tethered, they certainly are strongly correlated with the federal funds rate. So we’re going to see interest rates fall as soon as the next few days or within the next week.”
The rate cut marks the first time the Fed has decreased the federal funds rate since March 2020, when the country locked down due to the COVID-19 pandemic. Since then, the Fed has raised interest rates to try and combat record-level inflation throughout 2022 and 2023.
Smith said this latest rate cut means times have changed. The economist said the latest move by Fed Chair Jerome Powell could spur hiring among businesses and eventually lead to wage growth, all in an effort to achieve what experts call a “soft landing.”
“The Fed wanted to make sure that they had inflation under control and they wanted to make sure the rest of the economy was on pretty solid footing,” Smith said. "I think we're seeing that now. They didn’t push the economy into an economic recession by keeping rates as high as they did for as long as they did, and now they’re saying it’s a great time to drop rates and move the economy forward.”
With more milestones to look forward to soon, Shannen Slaughter sees in the Fed’s decision some promise in the road ahead.
“I hope they continue to cut the rates,” Slaughter said. “We all want to live the American dream of buying a house and having that perfect wedding and putting our kids in those amazing schools. But they cost money. If money becomes easier to borrow and less expensive to pay back, I think it's going to make everyone happier."