The Fed Meeting in September Is Likely to Slash Rates, Here's What to Expect

For nearly two years, the Federal Reserve has kept rates at their highest level in decades to fight inflation. It worked: price growth cooled from over 9% at its peak to something much closer to the Fed's 2% target.

But high rates come with a cost. Borrowing is more expensive, credit card debt has surged, and signs of a cooling job market are starting to show. The Fed doesn't want to wait too long and risk a harder slowdown. That's why many analysts believe September is the month we finally see a rate cut, and possibly more to follow.

What this means for your savings

Here's the catch: when the Fed lowers rates, banks almost always follow.

• High-yield savings accounts (HYSAs): The 4.00%+ APYs we're seeing now could slip over the next few months. These accounts adjust quickly to Fed moves.
• Certificates of deposit (CDs): If you've been on the fence, locking in a CD now can preserve today's higher yields for months or years, depending on the term. Once rates fall, newly issued CDs will almost certainly pay less.
• Traditional savings accounts: Big banks like Chase or Wells Fargo probably won't move much, but that's because they've been paying next to nothing all along. If you're still parked there, you've been missing out whether rates are rising or falling.

How to position your money now

Think about what matters most for your cash: flexibility or locking in yield.

• If you value flexibility, keep your money in a top HYSA. Even if the rate drifts lower, you'll still be earning far more than a traditional bank savings account, and you can access your cash at any time. Check out some of the best high-yield savings accounts and start earning more today.
• If you want certainty, consider a CD ladder. By spreading your deposits across different CD terms, you can lock in high rates today while keeping some money coming due regularly for reinvestment. This could be your last chance to guarantee rates this high before Fed cuts -- see the best CD rates today.

Either way, the key is acting before September's Fed meeting concludes later this afternoon if you want to secure the best yields. Waiting until after the cut means settling for less.

Don't wait for the Fed to decide your returns

The Fed meeting in September could mark the beginning of rates starting to fall. If you've been procrastinating on moving your savings, this is your wake-up call.

Check out the best high-yield savings accounts and CD rates available now. Because once the Fed cuts rates, the top offers on the market may be gone for good.