Federal Reserve is edging closer to cutting rates. The question will soon be, how fast?

AP Economics Writer

WASHINGTON (AP) — Two years after launching an aggressive fight against inflation and one year after leaving its benchmark interest rate at a near-quarter-century high, the Federal Reserve is expected to signal this week that it will likely reduce borrowing costs as soon as September. A rate reduction would amount to a momentous shift and a potential boost to the economy. Fed rate cuts, over time, typically lower borrowing costs for such things as mortgages, auto loans and credit cards. Still, a single cut in the Fed’s key rate wouldn’t by itself make much difference to the economy. As a result, the main question for the central bank will be: How fast and how far will it ultimately cut rates?