Wall Street thought the Fed was done lowering interest rates — at least for now. The Jan. 29 announcement of a “pause” proved the money runners were right.”We’re not doing anything,” the Fed all but said — and that’s news in the monetary world.The Fed cut short-term interest rates three times last year, including a jumbo half-point discount to kick off the lower-rate season in September. With the last quarter-point reduction in December, the low end of the target federal funds rate declined from 5.25% to 4.25%. That’s where it remains.A full percentage point lower and what results can we see? When it comes to your money — checking and savings accounts, CDs, mortgages, and other loans — it often takes fractions to measure the impact.You may have noticed an incremental change in the meager interest you earn on your deposit accounts.Many checking accounts pay a pittance — pennies on the dollar. The cash is moving in and out — mostly out? — of your account as you pay bills. It’s the convenience of liquidity that limits your earning power.In other words, if your interest-earning checking account goes down from the current national average of 0.07%, it will be hard to notice.Off-the-shelf savings accounts don’t pay much more. The latest average is under 0.41%, and it, too, is slipping lower. But this is not where savvy savers keep serious money.High-yield savings accounts have been friendly money keepers during the period of higher interest rates — paying 4% to 5% or more. Now, they’re in the 4% range, and some financial providers are posting rates below that.This is one category where shopping really pays off. However, expect the contraction in these rates to continue.Dig deeper: 10 best high-yield savings accountsIf you have $10,000 or more that you want to keep on the sidelines but close by, money market accounts have been convenient — but low-paying. Interest nationally averages 0.64%.Not much point to that.A better option might be a high-yield money market account, where rates are still near or a little better than 4%.Read more: 10 best high-yield money market accountsCD rates have been resilient, moving down just fractionally in recent months. A 12-month CD is averaging 1.82%, but you can find better deals if you’re willing to take the time to hunt them down — and park your money in a bank that may not be in your city.Your minimum deposit and term will affect your rate.Learn more: The best CD rates on the market Mortgage rates have been the most stubborn of all. Home loan rates actually rose following the first Fed rate cut in September. Analysts said the Fed move was already “priced in” to mortgage rates.Home loan rates are still lingering near 7%.Thing is, the Fed’s manipulation of overnight interest rates charged to banks doesn’t directly steer mortgage rates. Those are more influenced by the bond market, particularly the 10-year Treasury note. The bond market reacts to forecasts for economic growth — or the lack of it.It
Gio. Gen 30th, 2025
