Will the Fed Cut Rates Next Week? This Tool May Reveal the Answer

• Markets now see a December rate cut as more likely than a pause, reflecting how quickly expectations can shift.

• If the Fed cuts rates in mid-December, it will push today’s savings and CD yields lower.

• It’s easy to track rate-cut odds yourself with the CME FedWatch tool, which updates in real-time as traders react to new data.

When you want to know where bank savings rates are headed, it all comes down to what the Federal Reserve does next. That’s because the Fed’s benchmark rate directly influences how much banks and credit unions pay on savings, money market, and certificate of deposit (CD) accounts.

Less than two weeks ago, markets were betting the Fed would hold its benchmark rate steady at its last meeting of the year, pausing after quarter-point cuts in both September and October. But since then, the odds have flipped, with a strong majority of traders now predicting the central bank will make one more 2025 rate cut, at the conclusion of its Dec. 9–10 meeting.

The volatility of Fed predictions stems from several crosscurrents. The government shutdown delayed key economic data releases, leaving the Fed with less visibility on inflation and growth. Meanwhile, the central bankers have had to balance competing information: the job market has given mixed signals and inflation has ticked higher.

The latest pivot was triggered Nov. 21, when public comments from a key Fed policymaker—saying he was open to a December cut—quickly shifted sentiment and pushed market odds back in favor of a quarter-point cut at the next meeting.

If the Fed announces another rate cut, yields on savings and CD accounts will inch lower. Watching market odds can help you anticipate when those returns may start to slip.

Because the Fed’s benchmark rate directly shapes what banks and credit unions pay on deposits, a December rate cut would put clear downward pressure on savings, money market, and CD yields. That means cash you keep in a savings or money market account will likely earn less if your bank trims its APY in line with a Fed cut. CD rates on new accounts would also dip. (CDs you already hold are fixed-rate products, so their yields won’t change.)

Even with some slippage from the 2023–2024 highs, returns remain historically strong. Today’s best high-yield savings accounts offer mid-4% APYs, and a few still reach 5%. The top nationwide CDs remain attractive too, with guaranteed 4.00%–4.50% yields available across terms from 3 months to 5 years.

While there’s nothing you can do to shield a savings or money market account from falling yields, you can lock in one of today’s higher rates with a CD before a Fed cut nudges yields lower. By opening a CD now, you’re likely to secure a better yield than you’ll be able to earn later.

Aside from making sure your account offers a competitive rate, there’s nothing you can do to control what banks pay on savings accounts. But if you’re shopping for a CD, timing matters. Knowing whether a Fed rate cut is likely can help you decide whether to lock in a CD now, before the rates you can secure move lower.

What the Fed decides is never certain until its official announcement at the end of each meeting. Every six weeks or so, central bankers meet for two days to review the latest economic data and debate whether to move their benchmark rate. Since no one knows what new data will emerge before each meeting, any forecast is only an educated guess.

But financial markets make those guesses in real time, and you can see them for yourself. The CME FedWatch Tool shows the probabilities traders assign to different rate outcomes at upcoming Fed meetings. You don’t have to be a Wall Street insider to use it.

Click on the tool, and you’ll see tabs for each scheduled Fed meeting. For example, selecting the Dec. 10 tab at the top will display the market’s current odds for various rate scenarios. The chart indicates at the top what today’s target range is (for instance, “375-400” right now, which means a federal funds rate of 3.75%–4.00%) and compares it to potential new ranges. The bar labeled 350-375 represents the probability of a quarter-point cut, while 375–400 shows the odds of no change from today’s level.

Those bars move constantly, sometimes inching higher or lower with daily headlines, and other times swinging sharply after fresh data or Fed commentary. Checking the chart regularly is the easiest way to understand Fed expectations and to anticipate how savings and CD rates might move next.

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