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September 23, 2025

S4E31 – The Fed, Rate Cuts, and Your Retirement Plan

fed rate cuts

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The Fed has been everywhere in the headlines. In our latest Kitchen Table Finance episode, we explain what the Federal Reserve is, why its independence matters, and how a rate-cutting cycle may ripple through cash yields, bonds, and mortgages. If you’re 6–18 months from retirement, we also share level-headed steps to keep your plan on track.

What we cover:

  • Fed 101: Why the Fed was created, how it’s structured, and its main goals: price stability and maximum employment.

  • Independence matters: How keeping the Fed insulated from short-term politics supports confidence in the dollar and long-term stability.

  • Goldilocks problem: Balancing a cooling labor market with inflation risks, tariffs, and growth.

  • Portfolio takeaways: Why “don’t fight the Fed” is a useful reminder, and why we don’t overhaul portfolios based on predictions.

  • Cash, CDs, and bonds: What a falling-rate environment can mean for yields, existing bonds, and locking CDs.

  • Mortgages & refi: Practical thresholds for when to explore refinancing and why you shouldn’t buy a home assuming a quick refi.

  • Pre-retiree checklist: How to think about cash buffers, bond exposure, and staying invested if retirement is 6–18 months away.

Practical tips:

  • Keep enough cash for near-term needs; avoid parking excess cash for long stretches if yields are sliding.

  • Bonds may benefit as rates fall; new issues price lower yields, supporting existing bond values.

  • CDs can help smooth falling yields, but remember reinvestment risk when they mature.

  • Refinancing: Start running numbers when rates are roughly 1 percentage point below your current mortgage rate.

  • Stay the course: Markets look ahead. Rate cuts often follow softness that has already been priced in.

Resources

Thinking about retiring soon or adjusting your plan? Schedule a relaxed “fit” conversation at SRBadvisors.com and let’s make a plan that fits your life.

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