The Federal Reserve cut its benchmark interest rate by a half point for the first time in over four years on Wednesday, a decision that could lead to significantly lower borrowing costs for both consumers and businesses.

The cut comes just weeks before the presidential election and is the result of years of work taming inflation, it was reported. Experts have said the half-point cut signals that the Fed is committed to sustaining healthy economic growth and conquering inflation at the same time.

Such a cut is rare and normally reserved for emergencies. Within minutes of it being announced, the average for the Dow Jones has steadily increased — the first such increase in a series, experts believe. The DOW is now up by 215 points, spiking at times before declining, then rising once again. Just hours later, it was down by over 100 points for the day.

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Inflation is currently just above the Fed’s target level, and as such, the organization has been shifting its focus toward bolstering a weakening job market. In doing so, officials are hoping to achieve a “soft landing,” which means that inflation will be curbed without resulting in a sharp recession.

The Wednesday is expected to be the first in a series of cuts stretching well into 2025. High interest rates have been impacting gas prices for everything from groceries to gas and fanning public disillusionment with the economy.

It’s also provided fodder for the campaign of former President Donald Trump, who is the Republican nominee for the presidency. He has been using inflation to lob attacks at the campaign of Vice President Kamala Harris, the Democratic nominee, as he blames her and the administration of current President Joe Biden for the inflation rates — which aren’t entirely under their control.

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Experts have previously said that inflation rates are the result of a series of economic decisions stretching back years — decisions made by former presidents could impact what occurs during the tenure of the current one.

Harris, however, has been attacking Trump’s promises to implement tariffs on all imports, which she and other economists argue would significantly raise prices for consumers to rates much higher than they already are.

Over time, the belief is that the cut rates will lower the borrowing costs for mortgages, auto loans and credit cards as well as business loans. That will help business spending grow, and stock prices will do the same. Companies and consumers both will be able to refinance loans to lower their debt rates.

During a high-profile speech in Jackson Hole, Wyoming, last month, Chair Jerome Powell made clear that he and other Fed officials believe inflation has largely been defeated. It reached a low of 2.5% last month, which is down from a peak of 9.1% in June 2022.

Central bank officials reportedly fought against spiking prices by raising their key interest rate 11 times in 2022 and 2023 for a two-decade high of 5.3% as they attempted to slow down borrowing and spending, therefore cooling the economy.

Wage growth has also since slowed as well, reducing a potential source of inflationary pressure. Oil and gas prices are also falling, and experts are hopeful that inflation will continue to cool in the months ahead.

Consumers have also reportedly been pushing back against higher prices and forcing companies like Target and McDonald’s to issue deals and discounts, lest they lose out on immense amounts of revenue.

Employers have slowed down their hiring, too, however, and the unemployment rate has already risen a full percentage point since its half-century low in April 2023. It’s now at 4.2%, which is still very low.

Once unemployment rises at such a significant level, experts say it tends to keep climbing. Fed officials and other economists noted, however, that the rise in unemployment reflects an increase in new workers seeking jobs, especially new immigrants and recent college graduates, not just people who were laid off.

In Jackson Hole, Powell said the Fed “will do everything [it] can to support a strong labor market” as he added that “further weakening” in the job market is “unwelcome.”

Some economists, however, have taken issue with the fact that rates seem to be lowering so quickly — they’re no longer acting as a brake on the economy, and neither are they acting as an accelerant. What will result from the Wednesday cut remains to be seen.