What interest rate cuts mean for your money, savings

As Wall Street braces for a September interest rate cut by the Federal Reserve, Michele Martin, president of Prosperity, an EisnerAmper Company, joins Wealth! to break down how a cut could impact your finances.

Martin notes that while the first interest rate cut will come in September, the Federal Reserve's next cut will likely be in December. As the economy slows, she expects short-term rates — like in savings accounts, for instance — to shift downward. She encourages individuals to "invest and extend those investments" into longer-duration assets.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Melanie Riehl

Video Transcript

In about a month.

We'll enter the final quarter of 2024.

My goodness.

Where is it going?

But there is still plenty of news to come before the new year.

You've got rate cuts to the November election, all of which could affect your pocketbook and your wallet.

So how can you set yourself up for success?

2025 and beyond that here to help, we've got Michelle Martin, she is the President of Prosperity, which is an Eisner Amper company.

Thank you so much for taking the time here with us today.

So of the major events to come.

Uh Of course, we've been tracking towards the rate cut and ultimately finally, now getting a little bit more color on that being in September versus us, just guessing when it would happen.

So now what does that do for people who are trying to figure out what their pocketbook, what their wallet is gonna look like?

What their investment strategies are?

Is there a pivot that they should be initiating?

Um Absolutely Brad, great to see you this morning.

Thanks for having me on um, a um, people are thinking about portfolios now for a couple of reasons.

Number one, as we talk about, um, with the pending election, there's always questions around that.

But, um, more importantly, I think is just what you mentioned, which is the Federal Reserve, um, anticipated rate cuts in September and then likely again, even, um, in December.

Um, so, you know, the whole idea here is to slow growth.

Uh, they've been slowing growth and, and now we're at a point where, um, with interest rates starting to come down, uh, people are going to start seeing some changes.

One of them is, um, the nation, um, rates that we've seen in money markets and savings accounts.

So short term rates are gonna start shifting downward a little bit.

So, one of the things to think about is to invest and extend those investments in, um, say those savings or money markets that have, you've been sitting nicely on the sidelines with, um, doing what we call extending duration, putting that in investments that are a bit longer term so you can lock in those interest rates.