In the short term, the reduction will lead to slightly lower interest rates on mortgages, auto loans, and credit card debt.

With the first rate cut since 2020 issued this week, and two additional ones likely for November and December (when the Fed meets again), a HELOC could take the preferential place of home equity loans.

We concluded that this was the right thing for the economy and the people we serve,” the Federal Reserve chair, Jerome Powell, said, referring to the central bank’s decision to cut interest rates by half a point.