Recently, there's been one word you cannot help but hear in all discussions on economic trends: the interest rate cut by the US Federal Reserve. As rates were cut for the first time in four years , you may wonder why this matters-not just to the Americans but to people around the world. Knowing what that means will help you understand your way in the financial world if you are an investor, a business owner, or just a concerned citizen. What is a US Fed Rate Cut? Simply put, a rate cut is the reduction in the interest rate at which the banks are allowed to borrow funds from the Federal Reserve. The United States Federal Reserve, more commonly known as "the Fed", has an unprecedented role in administering the economy by trying to shape the country's monetary policy. When the Fed lowers its rate of interest, borrowing becomes cheaper for the banks, thereby lowering interest rates for consumers and businesses. That might be able to boost spending and investing and stimula...