On Thursday, the Federal Reserve's Federal Open Market Committee (FOMC) DESIGNATED that it would cut the federal funds rate by 25 basis points (bps), or 0.25%, due to “somewhat elevated” inflation and an unemployment rate that “climbed but remains low.”

The rate is now 4.5% to 4.75%, from 4.75% to 5%. A lower federal funds rate, or the borrowing rate that banks charge each other, means lower borrowing costs on credit cards and personal loans — so there's a ripple effect that can directly affect in your wallet. Banks decide individually how to respond to rate cuts.

The news was in line with analysts' expectations.

“We continue to expect the Fed to ease policy by 25 bps at each meeting through June next year amid resilient but moderate growth and cooling labor market trends,” EY chief economist Gregory Daco told Entrepreneur in an emailed statement ahead of the Fed's announcement.

The Fed previously cut rates with half a point in September, in its first decline in four years. The next FOMC meeting, planned for December 17 to 18, it is the last of the year; Daco, as well as EY colleague and senior economist Lydia Boussour, wait for both another 25 bps rate cut then.

^{Federal Reserve Chairman Jerome Powell. Photo: Al Drago/Bloomberg via Getty Images}

Daco wrote that after the Fed cut rates by an “extraordinary” 50 bps in September, it would opt for a “gradual recalibration” in November due to “continued disinflation and softening labor market momentum alongside strong growth of productivity”.

Related: A Fed rate cut finally happened for the first time in 4 years. Here's how the decision will affect your wallet.

Elyse Ausenbaugh, Chief Investment Strategist at JP Morgan Wealth Management, also told Entrepreneur in September that the 50 bps cut that month “creates some breathing room to move at a slower pace (or any other meeting) ” for subsequent meetings.

of CME FedWatch toola measure of the most recent FOMC rate change probabilities, consistent with Daco and Ausenbaugh's predictions of a slower pace of rate cuts. He put the chance of a 25 bps cut in November at 99.1% before the decision was announced.

Related: 'The stage is set:' EY's senior economist expects three rate cuts before the end of the year