Short and Sweet
Next Week's Federal Meeting: Expected Reactions of Savings and Certificate of Deposit Rates
Next Wednesday, the Fed's not likely to shake things up-expect the rates to remain as is. But, by the end of 2025, it's expected they'll lower rates by half a point or more. For now, though, the best savings account rates and CD rates aren't expected to change much. However, if a rate cut looms, CD rates may start to drop. But, with President Trump's unpredictable tariff policies, the Fed's outlook is a bit hazy.
Breakdown
In three consecutive meetings this year, the Fed has hesitated to tweak the federal funds rate, which followed a series of cuts late in 2024. While the Fed's rate-setting committee will gather next week, chances of a rate cut are essentially nil. Another rate hold is expected for July, meaning we won't see a rate cut until September. By the end of the year, though, markets predict about a 70% chance of at least half a point in rate cuts by the December meeting.
Since the Fed's not expected to change rates next week, savings account rates won't experience any significant changes in the short term. However, CD rates often adjust in anticipation of Fed moves, so they could start to drop once a rate cut seems likely. The best CD rates currently sit at 4.60% APY, but the Fed's meeting could impact these rates. The outcome largely depends on the Fed's statement and the signals provided by Fed Chair Jerome Powell. Expect these rates to remain stable until there's a stronger indication the Fed's moving towards a rate cut.
Final Thoughts
If you're on the hunt for high-yield savings accounts, our top picks currently range from 4.30% to 5.00% APY. But don't bank on these rates holding steady forever—rates are subject to change based on economic conditions and Fed decisions. Keep an eye on economic data and be prepared to act if rates start to slide. Happy banking!
Investors may want to closely observe the Fed's upcoming meeting for potential signs of a rate cut, as a lower federal funds rate could lead CD rates to decrease. On the other hand, those focusing on personal-finance matters, such as saving or investing, might find opportunities in high-yield savings accounts, though these rates are not guaranteed to remain stable in the long term due to economic conditions and Fed decisions. Furthermore, the potential for Initial Coin Offerings (ICOs) in finance could offer another avenue for personal-finance growth, though this field is independent of the Fed's decisions.
