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

Update: 2025-09-23

Description

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.

https://youtu.be/thvg8Gti424

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.