Fed Funds Futures Point to Significant Probability of Rate Cut - May Want to Lock in CD Rates

Fed Funds Futures Point to Significant Probability of Rate Cut - May Want to Lock in CD Rates

As late as Friday, it looked like a virtual lock that the Fed would keep rates at 2%. But the activity of the last couple of days has dramatically increased the odds the Fed will lower rates. If you are thinking of opening a CD, now may be a good time.

As late as Friday, it looked like a virtual lock that the Fed would keep rates at 2%.  But the activity of the last couple of days has dramatically increased the odds the Fed will lower rates.  The chart below shows the probablities for rate changes.  Look at the spike in probability for rates being lowered to 1.75% and even 1.5% and the drop in the probability of rates staying at 2%.  There is now a greater than 50% change that rates will come down. 

If you are thinking of opening a CD, now may be a good time.  CD rates, savings rates, and money market rates will drop if the Fed lowers the Fed Funds rate. 

For an ongoing discussion of interest rates and where they are going, please visit my Fed Funds Rate discussion page.

September Fed Meeting Probabilities

Sol Nasisi
Sol Nasisi: Sol Nasisi is the co-founder and a past president of BestCashCow, an online resource for comprehensive bank rate information. In this capacity, he closely followed rate trends for all savings-related and loan products and the impact of rate fluctuations on the economy. He specifically focused on how rates impact consumers' ability to borrow and save. He also has authored a wee

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