The federal funds rate is a benchmark that influences other interest rates throughout the economy. The Federal Reserve doesn't control the federal funds rate directly. Instead, it uses various monetary policy tools to steer the benchmark toward a target range, which is currently 4.75% to 5%.

The Fed's decision to cut interest rates by 50 basis points reflects its growing confidence in taming inflation and a renewed focus on supporting the job market.

If the Fed cuts interest rates today, borrowers will likely see interest rates ease off their peaks on things like credit cards and auto loans.