The Federal Reserve Makes a 50 Basis Points Emergency Fed Funds Cut

Author: Ari Socolow on March 3, 2020

The Federal Reserve has made a 50 basis point emergency cut in response to the spread of Coronavirus, moving the Fed Fund rate to a target of 1.00 to 1.25%. The market is pricing in the likelihood of further cuts on that March and April meetings.

Under any circumstances, we expect savings rates to move down to the new level within the coming days, and perhaps even lower over the coming months.

We recommended moving cash to No penalty CDs last week.

If you have cash that you don’t need to access right away, it would now seem like a very good time to be looking at CDs.

It is hard to recommend looking at anything longer than 1-year CDs at the moment. Best one-year CD rates are here.

However, if you believe that Coronavirus presents a long term risk to the economy and do not anticipate needing access to your cash in the near or intermediate term, you may want to look at longer term rates. Best two-year CD rates are here.

Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding BestCashCow in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.