(CNN) -- The Federal Reserve cut interest rates for the second time in about a week in January amid rumblings about a recession. While Wall Street may celebrate the lower rates, what will it mean for the average consumer? CNN personal finance editor Gerri Willis breaks it down.
CNN personal finance editor Gerri Willis explains how the rate cut will help some consumers and hurt others.
Why did the Fed take this action?
The idea here is to fend off a recession. Everybody is worried about the state of the U.S. economy. Lower rates mean cheaper loans. People can borrow money. Whether it's businesses or individuals, everyone is going to find it easier to do business and the economy is more likely to expand.
How soon will it affect mortgage rates?
Some consumers loans are pegged at the prime rate, which is generally three percentage points higher than the federal funds rate, which is what the Federal Reserve is moving around Wednesday. But the prime rate tends to track the federal funds rate.
Longer-term, fixed-rate loans such as mortgages or student loans track treasury bonds, so they're not immediately affected by the Fed's decision, but they follow broadly.
This means people with some types of variable rate mortgages are likely to see some more much-needed relief. That's good news. If your rate is resetting higher, it is time to start thinking about refinancing. You may be able to lock in a much lower rate. This could help you keep your home if you're afraid of losing it because interest rates have moved higher on you. Those with home equity lines of credit, you'll get a little help because when rates go down, your debt is cheaper.
However, we're probably still going to see a lot of foreclosures.
Who else will it help?
If you have credit card balances, you may get some relief. Credit card companies tend to move their rates on their variable rate credit cards in line with the prime rate of interest, but they don't have to. You might want to keep an eye on that.
People with existing car loans aren't going to see any relief because those rates are typically locked in at the time of purchase. If you're looking for a car loan now, you'll find lower rates than you have in the past.
And the bad news is ...
For savers, your returns may fall. If you've been putting money religiously into high-yield, interest rate-bearing accounts, the Fed cut will reduce the rates that you're earning on your money. E-mail to a friend 
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