Why is the Fed expected to cut rates in September 2025?

The Federal Reserve is expected to cut rates in September 2025 to support the slowing labor market and provide economic stimulus, despite inflation still running above its 2% target.

How will a Fed rate cut affect my savings account?

High-yield savings accounts and CDs may see rates decline from today’s 4.3–4.5% levels as borrowing costs fall, reducing the returns savers earn on cash deposits.

What does a Fed rate cut mean for retirement accounts?

Lower rates can reduce bond yields, affecting income streams in retirement portfolios. Stocks may get a short-term boost, but long-term planning requires balancing growth, income, and inflation risk.

Is a Fed rate cut good or bad for borrowers?

For borrowers with variable-rate debt such as credit cards, HELOCs, or adjustable mortgages, a rate cut can lower payments. It may also create opportunities to refinance at lower rates.

Another Fed Rate Cut in September? What It Means for Your Money

HFF Staff Writer
2 hours ago
3 min read

Text "Another Fed rate cut in September?" overlays a graph showing a downward trend and part of a dollar bill background, suggesting economic concerns.

Why Everyone’s Watching the Fed

The Federal Reserve is expected to cut interest rates in September 2025. If you're like most people, you might hear “rate cut” and immediately think: cheaper loans, better for my mortgage, great for stocks. What you might not hear as much: what rate cuts do to what you already have—especially your savings, CDs, bonds, and retirement income. Let’s dig into what’s settled, what’s still uncertain, and what you should be thinking about.

The Numbers Behind the Headlines

The Fed is widely expected to ease its policy by 25 basis points at the meeting on September 16–17, 2025 (Investopedia).
Major banks—including Morgan Stanley, Barclays, BNP Paribas, and Nomura—now anticipate at least one cut, pointing to labor market softening and inflation still above target (Reuters, “Morgan Stanley, Deutsche Bank”).
Inflation recently ticked up to 2.9% year-over-year in August, higher than the Fed’s 2% goal (CoinDesk).
The 10-year U.S. Treasury yield sits at about 4.04%, reflecting bond market adjustments (TradingEconomics).

The Part People Don’t Expect

Most people think of cuts as good news. But here’s the catch:

While cuts lower borrowing costs, they also shrink returns on new savings products like CDs or high-yield accounts.
Inflation hasn’t been conquered yet—cutting too soon could risk letting it linger (Reuters, “Nomura”).
Instead of just two cuts in 2025, analysts now forecast three—September, October, and December (Reuters, “Morgan Stanley, Deutsche Bank”). That means markets may have already priced in more than many savers or retirees expect.

Upsides and Trade-Offs

Upsides:

Borrowing could get cheaper across mortgages, credit cards, and personal loans. That’s relief for anyone carrying adjustable debt.
Businesses may be encouraged to invest and hire, providing support to a cooling labor market (Al Jazeera).

Trade-Offs:

With inflation still near 3%, real returns could shrink.
Fixed-income investors may face lower yields going forward.
If the Fed cuts too aggressively, it risks losing credibility—markets dislike mixed signals.

How It Hits Your Wallet

Savings & CDs: The best high-yield savings accounts today hover around 4.30%–4.50% APY (NerdWallet). A rate cut will likely push those numbers down. Locking in a CD now might preserve yield.
Bonds & retirement: Expect future bond yields to decline, which can affect retirement income.
Debt: Variable-rate debt—credit cards, HELOCs, adjustable-rate mortgages—may get less expensive.
Inflation protection: With CPI still above target, consider assets designed to hedge against inflation, such as TIPS or real estate.

Where Guidance Matters Most

At Halter Ferguson Financial, we don’t chase headlines—we help clients plan through them. Rate cuts, hikes, bull runs, or slowdowns—each is a chapter, not the whole story. What matters is how those chapters fit into your financial life.

That’s why we design Custom Financial Blueprints: plans that balance growth, income, and inflation risk while staying true to your goals.

Don’t Wait for the Next Headline

The September Fed meeting is just another reminder of how quickly financial conditions can shift. Don’t gamble your retirement or savings strategy on what happens in a single meeting.

Reach out to Halter Ferguson Financial today to build your Custom Financial Blueprint.

Works Cited

Al Jazeera. “US Fed Expected to Cut Rates Amid Cooling Labour Market, Surging Inflation.” Al Jazeera, 12 Sept. 2025, www.aljazeera.com/economy/2025/9/12/us-fed-expected-to-cut-rates-amid-cooling-labour-market-surging-inflation.

CoinDesk. “Fed’s Sept. 17 Rate Cut Could Spark Short-Term Jitters but Supercharge Bitcoin, Gold and Stocks Long Term.” CoinDesk, 13 Sept. 2025, www.coindesk.com/markets/2025/09/13/fed-s-sept-17-rate-cut-could-spark-short-term-jitters-but-supercharge-bitcoin-gold-and-stocks-long-term.

Investopedia. “Next Fed Meeting: When It Is in September and What To Expect.” Investopedia, Sept. 2025, www.investopedia.com/next-fed-meeting-september-11808225.

NerdWallet. “Best High-Yield Online Savings Accounts for September 2025.” NerdWallet, Sept. 2025, www.nerdwallet.com/best/banking/high-yield-online-savings-accounts.

Reuters. “Morgan Stanley, Deutsche Bank Expect Three US Interest Rate Cuts This Year.” Reuters, 12 Sept. 2025, www.reuters.com/business/morgan-stanley-deutsche-bank-expect-three-us-interest-rate-cuts-this-year-2025-09-12.

Reuters. “Nomura Sees Fed Rate Cut in September as Inflation Cools.” Reuters, 13 Aug. 2025, www.reuters.com/business/nomura-sees-fed-rate-cut-september-inflation-cools-2025-08-13.

TradingEconomics. “United States 10-Year Government Bond Yield.” Trading Economics, Sept. 2025, tradingeconomics.com/united-states/government-bond-yield.

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