#FedRateCutAffectsDollarTrend When the Federal Reserve cuts interest rates, it impacts both demand (consumer spending, business investment) and supply (production, labor markets, and costs). 1. Impact on Demand (Usually Increases) ✅ Lower Borrowing Costs → More Consumer Spending Lower interest rates make loans and credit cheaper (mortgages, car loans, credit cards). This boosts consumer spending, increasing demand for goods and services. Example: More people buy homes, appliances, and cars when loan rates drop. ✅ Higher Business Investment Companies can borrow at lower costs to expand operations, hire workers, and buy equipment. Increased capital investment boosts overall economic demand. Example: A factory may take out a loan to buy new machinery, increasing production.