Lucid Group (LCID 9.09%) The stock is seeing big gains on Friday, with the electric vehicle (EV) maker’s shares up 9.6% as of 3 p.m. ET, according to data from S&P Global Market Intelligence.

The EV specialist’s stock is gaining ground after Federal Reserve Chairman Jerome Powell suggested the central bank is on track to cut interest rates in September. Not only are rate cuts a positive catalyst for the stock market overall, but they could also be a particularly positive development for Lucid and other high-risk, high-reward stocks.

Powell prepares the ground for a rate cut in September

In his keynote speech at a Fed event in Wyoming, Powell confirmed that long-awaited rate cuts are now within reach. Citing improving inflation data and signs of a weakening labor market, Powell said the time has come to adjust interest rate policy. Although he offered no guarantees, this appears to set the stage for the announcement of rate cuts at the Fed’s September meeting.

What’s next for Lucid stock?

Growth stocks and speculative stocks tend to perform better in a low-interest rate environment. Powell’s comments have given Lucid a big boost, and the stock price is up about 1% year-to-date. In addition to boosting demand for growth stocks and increasing investors’ risk appetite, rate cuts could also have business-specific implications for the EV player.

Lucid is still making large losses and had about $2 billion in long-term debt at the end of last quarter. If interest rates fall significantly, the company may be able to refinance its debt and reduce its overall interest expense.

The electric vehicle specialist has relied largely on investments from Saudi Arabia’s Public Investment Fund (PIF) to finance its operations. The PIF is Lucid’s majority shareholder, and in the company’s last earnings report it announced that it would provide another capital injection. However, the sale of shares to the PIF also meant significant dilution of other shareholders’ shares. With interest rates expected to fall, Lucid should have more flexible financing options available to it.