Experts recommend locking in CD rates for 9-month or one-year term
Federal Reserve expected to lower borrowing costs
Investors anticipate a rate cut in September
Money market fund yields likely to fall with rate cuts
Response to moderating job market and slowing inflation
In the summer of 2024, the Federal Reserve is expected to lower borrowing costs within months in response to a moderating job market and slowing inflation. Investors anticipate a rate cut in September, according to the CME FedWatch Tool. With money market fund yields likely to fall if the Fed starts cutting rates, experts recommend locking in CD rates for a 9-month or one-year term. Lower interest rates could make a meaningful difference in home buying costs and refinancing options for mortgages and home equity lines of credit (HELOCs). It's also a good time to sign up for a zero-rate balance transfer card or find one with lower rates to pay off credit card debt effectively. However, the Federal Reserve's rate cuts may not necessarily translate into lower rates for savers in bank accounts and certificates of deposit. The best course of action depends on individual financial goals, risk tolerance, and timeline.
The Federal Reserve is expected to embark on a rate-cutting campaign over the next two years, starting as early as September.
Lower rates could make a meaningful difference in home buying costs.
Sign up for a zero-rate balance transfer card or find one with lower rates to pay off credit card debt effectively.
It’s a good time to ‘lock in’ CD rates for a 9-month or one-year term.
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The article contains editorializing and selective reporting. The author makes statements that imply the impact of interest rate cuts on various financial products without providing specific data or studies to back up those claims. For example, the statement 'rates are not going to fall fast enough to bail you out of a bad situation [this year]' is an editorial opinion and does not provide any evidence or data to support it.
Rates are not going to fall fast enough to bail you out of a bad situation [this year]
The prospect of lower borrowing costs will be welcome news to those seeking loans or anyone trying to reduce their existing debt loads.
Given that mortgage rates have fallen at least 1.25% in every rate-cutting cycle since 1971, and often over 2% or 3%, Diodato sees it this way:
