Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation. Federal Reserve (Fed) Governor Michelle Bowman said on Tuesday that she supported the quarter-point interest rate cut and added that now it's important for the Fed to proactively support the job market, according to Reuters.