The Fed just cut its benchmark interest rate by a half-point, the first cut in over four years. But what does that mean for the average American? How could it impact their daily lives?

The answer to that is a complicated one. The effects of Wednesday’s landmark decision could be felt for months to come, or they not even be felt until several months from now.

In essence, the decision will make borrowing money much cheaper, but it won’t exactly make savings instruments yield high returns, as many people were hoping, Forbes reported.

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Interest rates are expected to reach around 4.75% or 5%, down from the 5.25% to 5.5% rates from last July. These are still the highest that rates have been since 2001.

According to Forbes, the Fed can only control the funds rate, which determines the level of interest charged in overnight cash reserve transactions between banks. It’s up to the central bank to change its own rate, which will then impact borrowing costs across the board.

Lenders will typically set rates based on Fed rate ranges, but ultimately, rate cuts are expected to have a ripple effect throughout the entire economy in a sort of trickle-down manner.

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The first effects will be felt in the housing market. Mortgage rates are expected to lessen after hitting a 19-month low last week, especially given the cut on Wednesday. Rates reached a low of 6.2% last week on 30-year fixed loans, it was reported.

Then, the cut will be felt in car loans, which are expected to get cheaper. Auto loans are now at their most expensive since 2001, it was reported, and are up from 2021’s sub-5% rate, Forbes reported, reaching about 8.7%. Student loans and credit card interest are also expected to lessen significantly.

As far as the job market is concerned, more accessible credit will be available. And that means friendlier hiring in most cases, as companies can afford to hire more people amid cheaper borrowing costs.

In terms of savings, however, Americans won’t be getting as much yield from their savings accounts, as lower interest rates also mean lower returns.

Stocks, on the other hand, are expected to rise, with investors now having more money to invest in them. The Dow Jones, for example, is now down over 100 points for the day, but it saw a spike as soon as the rate cut was announced.

Forbes reported that the U.S. benchmark S&P 500 stock index has gained about 86% consistently in the 12 months after a rate cut, with data based on a cycle dating back to 1929, Charles Schwab reported.

While rates are ultimately lowering, Forbes predicted, citing data from the Fed, that rates will continue to be high compared to recent year averages dating back to 2008. But what will ultimately happen remains to be seen.