FED Rate Cut Shifts Bank Accounts, Mortgages, and Loans in 2025

The Federal Reserve's first rate cut of 2025, a quarter-point reduction, signals a shift in financial markets. Savers face diminishing returns as bank account yields decline. High-yield savings accounts, still NEAR 4%, offer a temporary refuge, but even these rates may slip as banks adjust. Money market accounts follow suit, with top online options hovering around 4% while standard accounts languish below 1%. The imperative for consumers is clear: seek out the highest yields now before further cuts take hold.

Mortgage rates, tethered to the 10-year Treasury yield, have dipped to their lowest in nearly a year but remain stubbornly above 6%. Housing experts predict this threshold will hold through 2026. Personal loans tell a different story, with rates nearing 12.5% after years of FED hikes. The bond market's reaction to the FED's MOVE has been swift, but the full impact on borrowing costs remains uncertain.