NEW YORK -- The Federal Reserve is poised to cut its benchmark interest rate next month from its 23-year high, with consequences for consumers when it comes to debt, savings, auto loans and mortgages. Right now, most experts envision three quarter-point Fed cuts — in September, November and December — though even steeper rate cuts are possible.

“The time is right” for the Federal Reserve to lower interest rates, Powell stated in his primary address at the Fed’s annual economic gathering in Jackson Hole, Wyoming . “The course of action is clear, and the timing and pace of rate reductions will depend on incoming data, the evolving outlook, and the balance of risks.”

Based on Powell's statements and recent economic data, the central bank is anticipated to decrease its benchmark rate by a quarter-point at its next meeting and to implement further rate cuts in the coming months.

Here's what consumers should know:

According to Greg McBride, chief credit analyst for Bankrate, savers should secure attractive returns now, before the expected rate reductions begin.

"For those who might be considering Certificates of Deposit or bonds — you should act now," he advised. “There's no advantage to waiting because interest rates will be moving lower.”

McBride emphasized that anyone nearing retirement has a good opportunity to lock in CDs at the current relatively high rates.

“If you do that, you'll ensure a consistent flow of interest income at rates that are likely to outpace inflation by a considerable margin,” said McBride.

“Your credit card bill is unlikely to drastically decrease immediately after the next Fed meeting,” cautions LendingTree chief credit analyst Matt Schulz. “Don't expect overnight miracles.”

However, the declining benchmark rate will eventually lead to more favorable rates for borrowers, many of whom are facing some of the highest credit card interest rates in recent history. The average interest rate is 23.18% for new offers and 21.51% for existing accounts, according to WalletHub’s August Credit Card Landscape Report.

However, “it is crucial for individuals to recognize that interest rates are unlikely to decline at a rapid pace,” Schulz emphasized.

He suggested that individuals should consider options such as seeking a 0% interest balance transfer or obtaining a low-interest personal loan. Alternatively, contacting your credit card issuer to discuss a potential reduction in your interest rate could be beneficial.

"In the short term, those factors will have a much greater impact than falling interest rates,” Schulz said.

The Federal Reserve’s benchmark rate doesn’t directly control or mirror mortgage rates, but it does exert influence, and the two “tend to move in tandem,” said LendingTree senior economist Jacob Channel.

In recent weeks, mortgage rates have already declined in anticipation of the Fed's predicted cut, he pointed out.

“This demonstrates that even when the Federal Reserve remains inactive and maintains its current course, mortgage rates can still fluctuate,” Channel stated.

Melissa Cohn, regional vice president of William Raveis Mortgage, corroborated this sentiment, emphasizing that the most crucial factor is the message the Fed conveys to the market, rather than the specific rate adjustment itself.

“I’ve had numerous conversations with people who secured their mortgage rates over the last 18 months, when rates were at their highest, inquiring about the potential for refinancing and the savings they could achieve,” she stated. “The outlook seems positive, and hopefully, this will have a positive impact on the real estate market, encouraging more buyers to enter the market.”

Channel mentioned that a majority of Americans have mortgages with interest rates around 5%, indicating that rates might need to drop further than their current average of 6.46% before many homeowners consider refinancing.

“While auto loan rates are expected to decrease, it’s crucial to remember that it’s still essential to compare options and not simply accept the rate offered by a car dealership,” emphasized Bankrate’s McBride. “It’s also highly advisable to save as much as possible and make a substantial down payment on your vehicle.”

McBride predicts that the commencement of rate cuts and the avoidance of an economic downturn will likely lead to lower auto loan interest rates in 2024 — particularly for borrowers with strong credit histories. For those with less favorable credit, double-digit rates are likely to remain for the rest of the year.

Last week, the government announced that consumer prices increased by only 2.9% in July compared to the previous year, the smallest rise in over three years. However, employment figures have raised concerns for some economists. Recent data shows that hiring in July was significantly lower than anticipated, resulting in an unemployment rate of 4.3% , the highest in three years, suggesting a weakening economy. Nevertheless, robust retail sales have helped alleviate fears of a recession.

The pace at which the Fed continues to lower rates following September will be influenced by the performance of inflation and the job market in the upcoming weeks and months.

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