The Fed is likely to cut interest rates this week. Do These 3 Things Before It Happens

Have you noticed that the cost of groceries and other expenses are not rising as quickly as they were at this time last year or the year before? Fortunately, inflation is decreasing, which is very good for our budgets.

The Federal Reserve is clearly pleased with how inflation is falling. In September, the central bank cut its benchmark interest rate by half a percentage point in response to slowing inflation. And when it meets again this week, on November 6-7, there is a good chance a second interest rate cut will be announced.

This step could impact your finances, and it’s worth taking these key steps before that happens.

1. Open the CD

Although the Fed doesn’t set rates on certificates of deposit (CDs), when its benchmark interest rate falls, banks start paying less. In fact, you may have already noticed that most CDs are no longer yielding 5% like they did earlier this year. This drop came as a result of the Fed’s rate cut in September.

If you want to lock up a CD before rates drop again, act quickly. The good news is that many banks still offer great rates on CDs. Click here to see a list of the best CD prices available now..

2. Check your credit score

The Fed’s rate cut will likely lead to lower interest rates on savings accounts and certificates of deposit. This is bad news.

The good news is that lower rates should also lower borrowing costs overall. So now is the time to check your credit score and see if it needs to be improved. If so, you can start making a plan to improve your credit score so you can take advantage of lower borrowing costs for things like auto or personal loans.

Of course, improving your credit score can take time. But now it’s important to check your account so you know what you’re dealing with. After that, you can start making sure your bills are paid on time and working on reducing your credit card balances, both of which can lead to a higher credit score over time.

It’s also worth checking your credit report for errors. Correcting an error that’s working against you can result in a fairly quick increase in your credit score, which is helpful during times when rates are falling.

3. Hire a real estate agent

Mortgage rates are not guaranteed to fall once the Fed makes another rate cut. But there’s a good chance they’ll fall in the coming months, which could make homeownership more affordable.

If you think you’ll want to start buying a home in the next few months, make a few calls to find a real estate agent as soon as possible. It’s best to do this before rates drop, because then the best agents in your area may be too overwhelmed to take on new clients.

Of course, there is a chance that the Fed there won’t be will eventually cut interest rates at its meeting later this week. But if that’s the case, he’ll likely make another rate cut when he meets in December.

The Fed is expected to cut rates several times next year to reverse hikes it made in 2022 and 2023. So all of these steps make sense regardless of what happens on November 6-7.