Despite the uncertainty surrounding the Federal Reserve’s interest rate cut timeline, investors remain optimistic, with over 74% of traders predicting a rate cut by September. To navigate these uncertain financial waters, Tayne Law Group Founder and Principal Attorney Leslie Tayne joins Wealth! to provide guidance on money management strategies.
Tayne emphasizes the importance of the potential rate cut for consumers, saying, “as a consumer, this is an important number.” She notes two impacts: Lower rates can stimulate borrowing, benefiting consumers looking for a loan or mortgage. However, she cautions that savings like CDs and high-yield savings accounts are likely to have lower returns. Given that perspective, Tayne advises, “now may be the time to lock in those higher rates.”
Recognizing the impact of interest rates on finances, Tayne emphasizes the importance of financial review: “You want to consider your budget over all different periods, and a rate cut is a good time to review your budget.”
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This post was written by Angel Smith
Video Transcript
The odds of a September rate cut are increasing as 74% of traders are betting on one at the Fed’s next meeting in September.
But do you know what to do with your money if cuts come up for discussion?
Let’s bring in Leslie Tane, who is the founder of the Ta law group and the lead attorney here with us, Leslie.
Thank you so much for taking the time to join us here at Yahoo Finance.
So what, what are people to do?
They see that the first interest rate cut finally came through the feds chair, Powell, takes the podium and says, here’s why we did it and here’s what the way forward looks like.
But many people are still trying to figure out how not to fight the Fed, but to predict what they are doing.
True.
If the feds lower rates, it’s something to watch out for as a consumer.
These are important numbers when rates go down, there are many opportunities for borrowing.
So at this time, if you’re looking to borrow some money either in the housing market or otherwise, you may want to hold off on larger purchases to see if rates actually go down.
And the opposite of that is if you’ve been saving and C DS, when rates go down, your savings account rate will go down.
Same with C DS.
Now may be the time to lock in higher interest rates on savings accounts and C DS.
When is it time to refinance when those rate cuts start happening?
Many people will sit on the edge of their ergonomic chairs trying to understand.
OK. Now, do we refinance now or wait for a later rate cut?
It’s definitely time to look at whether you’ve taken out a mortgage loan or high-interest rate debt over the past year, a year and a half when interest rates were at their highest.
It’s time to watch the market to see when to pull the trigger on refinancing those who have excellent rates from a few years ago at 3% or hovering around 3%.
Now, it wouldn’t be time to refinance it yet, but as rates go down, you definitely want to watch the market because a quarter point may not make a difference in refinancing.
You want to request larger rate reductions or additional rate reductions over time.
It’s possible we could see a quarter percent rate cut by the end of the year.
So, coming into the new year in 2025, it is time to look at the Federal Federation and see what will happen in the coming year.
Of course, when you think about how people should potentially adjust their budget, what kind of considerations should they take into account?
You want to consider your budget in all the different periods of reduced rates, it’s another time to review your budget savings accounts.
If you’re living off savings or investments and interest rates are falling, then you may find that you don’t have as much income to grow during that time because rates are lower.
So it encourages those consumers and businesses to start borrowing and spending.
So it’s time to see.
Well, in my budget, where should I be to buy new items?
Uh even uh everything that can be considered something with credit, from cars to houses and even your savings.
So it’s important to look at your budget regularly, especially if your budget and income are immediately affected by rate changes.
And then just finally, Leslie while we have you here, some of the big purchases that people can put back in the bank or at least start kicking the tires literally and figuratively, I think in some cases here, you know , how should they actually calculate when to make those purchases?
Some of them are based on need and time.
If you figure it out, let’s say you have a car that is at the end of its life or on lease.
And you are, and you are looking to refinance or buy a new vehicle that you will buy on credit.
It’s time to look at it and say, how long can you stop doing this?
If you have a low interest rate to begin with, on auto or other interest-related debt, then you want to keep it as long as possible without refinancing.
Remember, there is always a cost to refinance and purchase any money loan, not just the interest rate, but also the cost of borrowing the money.
So if you have a low interest rate, on any revolving credit or secured or unsecured debt, you want to make sure you keep it.
If you have high interest rate debt on this, you want to start thinking about when is, when is it time to pull the trigger?
When should you do this?
And you are able to do that, Leslie Tane, who is the founder of the legal group and the lead lawyer arrested.
Thank you so much for taking the time with us today.
Leslie.
Thanks for having me.