The Fed Will Probably Cut Interest Rates This Week. Do These 3 Things Before That Happens

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A rate cut may be coming imminently. Read on to see how to set yourself up for financial success. [[{“value”:”

Have you noticed that the cost of groceries and other expenses aren’t rising as quickly as they were at this time last year, or the year before? Thankfully, inflation has been cooling, which is a great thing for our budgets.

The Federal Reserve is clearly happy with the way inflation has been easing, too. In September, the central bank lowered its benchmark interest rate by half a percentage point in response to slowing inflation. And when it meets again this week on Nov. 6–7, there’s a good chance a second interest rate cut will be announced.

That move could impact your finances, and it pays to take these key actions before that happens.

1. Open a CD

Although the Fed doesn’t set certificate of deposit (CD) rates, when its benchmark interest rate drops, banks start to pay less. In fact, you may have already noticed that most CDs are no longer paying 5% like they were earlier in the year. That drop came as a result of the Fed’s September rate cut.

If you want to lock in a CD before rates fall again, act quickly. The good news is that plenty of banks are still offering great rates on CDs. Click here for a list of the best CD rates available now.

2. Check your credit score

A rate cut from the Fed will likely lead to lower interest rates for savings accounts and CDs. That’s the bad news.

The good news is that a rate cut should also lower the cost of borrowing on a whole. So now’s a good time to check your credit score and see if it needs a boost. If so, you can start mapping out a plan to raise your credit score so you can take advantage of lower borrowing costs for things like auto or personal loans.

Of course, raising your credit score is something that may take time. But it’s important to check your score now so you know what you’re dealing with. From there, you can start making sure your bills are paid by their due dates and work on reducing your credit card balances, both of which could lead to a higher credit score in time.

It also pays to check your credit report for errors. Correcting a mistake that works against you could lead to a fairly quick credit score boost, which is a good thing to have at a time when rates are falling.

3. Line up a real estate agent

Mortgage rates aren’t guaranteed to drop as soon as the Fed makes its next rate cut. But there’s a good chance they’ll fall in the coming months, which could make home ownership more affordable.

If you think you’ll want to move forward with a home purchase in the next few months, make some calls to line up a real estate agent as soon as possible. It’s best to do so before rates drop, because from there, the best agents in your area might find themselves too overloaded to take on new clients.

Of course, there’s a chance the Fed won’t end up cutting interest rates at its meeting later this week. But if that’s the case, then it will most likely move forward with another rate cut during its meeting in December.

The Fed is expected to make multiple rate cuts in the coming year to reverse the hikes it implemented in 2022 and 2023. So all of these moves make sense regardless of what happens on Nov. 6–7.

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