So should you start making money moves now in anticipation of lower interest rates?
Should you plan for 2025 interest rate cuts?
Even with most economistspredicting more rate cutsin 2025, don’t expect a dramatic shift all at once.
Each change will take time to roll out, and the impact on you will likely be delayed.
But don’t let any one news story cause you to panic or dramatically change course, Nathanson advised.
“The average individual…can’t keep up with all of these to-do’s,” she said.
“Just stay focused on what’s key to you.”
Should you save or invest?
First, it’s important to understand the purpose of each of your short- and long-term savings vehicles.
For example, Nathanson said, “Emergency savings aren’t meant to be our biggest wealth builder.”
you’re free to still lock in ahigh ratebefore the Fed rate likely drops next year.
Should you refinance your mortgage?
The recent Fed rate cut may have you hopeful aboutrefinancingand saving money soon.
Expertsdon’t expect a refinancing boomanytime soon.
Should you consider buying property?
If mortgage rates were to fall to 4% or lower, though, half would consider it.
Advisers warn against being guided by interest rates alone.
Instead, consider your finances and readiness to become a homeowner, according to Ortel.
“Do you have the financial stability or the savings?”
“Do you have the stability that will support you owning a home?
Have you identified a home you want to live in for the next several years?”
Nathanson also pointed out thathousing pricesare “still deeply unaffordable” for many buyers.
Should you wait to take out a loan?
What does the Fed rate say about the job market?
The major reason Fed rates make splashy headlines is that it indicates something happening in the larger economy.
A rate drop usually followsslowing inflation, rising unemployment or both.
The recent historically high rate was meant to cool the economy as inflation spiked with post-pandemic demand.
But a rate cut doesn’t necessarily mean experts are expecting a rise in unemployment.
Inflation isnearly downto the Fed’s target of 2%.
Hiring, however, has been down.
