What the Fed’s interest rate cuts mean for Massachusetts

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It’s Monday, but at least Red Line trains are running on the Braintree branch again. (And with 18 miles worth of new track, they should be running a lot faster, too.)

Now to the news:

Banking on it: Earlier this month, the Federal Reserve began aggressively cutting interest rates as it turns its focus from inflation to jobs and economic growth. It was its first cut since 2020 — and more are expected this year and into 2025. When it comes to the Massachusetts economy, WBUR’s Zeninjor Enwemeka reports there are a couple industries that may get a particular boost.

• Finance and tech: Gus Faucher, the chief economist at PNC, told Zeninjor he expects financial services activity to increase as it becomes less expensive for consumers and businesses to borrow money. The tech industry, which has seen layoffs and declines in funding across the state over the past year, may see the biggest reward from this, according to Faucher. “ If investors can borrow at lower rates, that increases their access to funding. And so that results in more tech investment,” he said. “So for some of these smaller companies, for some of these startups, that means greater capital inflows and a greater ability to expand.”
• Good news for wannabe homebuyers: High interest rates didn’t only cause home mortgage rates to go up; the high cost of borrowing had also been a drag on much-needed housing construction. But Faucher told Zeninjor the Fed’s cuts should reverse both those trends. (Home mortgage rates had already started coming down a bit in anticipation.) It won’t be a quick fix, though. Massachusetts still needs to build a lot more homes to deal with its housing crisis. (You can dig deeper into the state’s big new housing law to start chipping away at this problem here.)
• What else does this mean for consumers? Aside from mortgage rates, interest rates on car loans and credit cards should drop, too. On the other hand, people with savings accounts may begin to notice they’re not earning as much monthly interest — especially those who have enjoyed big returns on high-yield savings accounts over the past couple years. (However, it might be a good time to lock in a CD for a year or five.)

So long: It’s the last day of doing business in Massachusetts for Steward Health Care. WBUR’s Deborah Becker reports the bankrupt hospital company expects to close deals today to sell its five remaining hospitals in the state, officially transferring them into the control of a trio of nonprofit health care companies.

• What does that mean for you? No big changes are likely for patients, health care consultant Marc Bard told Deb. However, there could be some complications at the administrative level, as the new owners work to integrate their hospital systems, he said. “They liken it to changing the tires on a car while the car is [moving],” Bard said. “It’s going to be really hard.”
• Meanwhile: Today is also the last day on the job for the Steward CEO Ralph de la Torre. The embattled executive announced he will step down on Tuesday, blaming Massachusetts’ health care reimbursement rates for Steward’s financial failures.

Heads up: A looming nationwide strike by dockworkers this week could shut down Boston’s busy shipping port. Roughly 25,000 dockworkers at East Coast and Gulf Coast ports are poised to go on strike as early as Tuesday, and state officials are warning businesses that Conley Terminal in South Boston will be impacted.

• MassPort has extended hours for companies to access cargo at the port. But leaders say imports that are still there by end-of-day could be inaccessible if a strike moves forward.

Welp: The Winchester Center commuter rail station was supposed to partially reopen today, after a multi-year closure. However, Lowell Line riders will have to wait due to what the MBTA is calling “unforeseen technical elevator issues.” The T says shuttle buses are replacing service until further notice.

Somerville’s central library is set to resume normal hours this Wednesday — with new security guards and cameras. The move comes after the library abruptly began closing for a few hours in the afternoon over the past month due to rowdy (and sometimes violent) teen behavior.

P.S.— The Celtics play their first pre-season game of the 2024-25 season this week, but we’re looking back at the nearly 80 seasons that came before it tonight at CitySpace. Boston Globe basketball reporter Gary Washburn will be here to talk about his illustrated history of the Celtics’ most memorable moments – including some that even the most diehard Cs fans may have forgotten. Get your tickets here.

This article was originally published on WBUR.org.