Fed Lowers Rates – What This Means for You

Today, the Federal Reserve lowered interest rates by 25 basis points (0.25%) to a new range of 4.00%–4.25%. This may be the first step in a broader easing cycle. Markets are currently pricing in an 80% probability that the Fed Funds rate will fall to 3.00%–3.25% or lower by this time next year.

While Fed decisions like this grab headlines, your long-term investment strategy should not shift based on short-term moves. Your portfolio is designed around your goals and time horizon—not individual policy announcements.

That said, rate cuts do create an opportunity to review other areas of your financial picture:

• Cash & Liquidity Management – With rates potentially trending lower, it’s worth evaluating where you hold cash and ensuring reserves are both accessible and productive.
  
  

• Debt & Liability Management – Lower borrowing costs may present opportunities to refinance, restructure, or plan around liabilities. While this initial cut may not change much, if the Fed continues easing into next year, refinancing and liability planning opportunities could expand.

In other words, while your long-term allocation doesn’t change, the liability side of the balance sheet deserves renewed attention.