News
The Fed Cut Rates Again — Here’s The No. 1 Money Move to Make Right Now
The Federal Reserve has cut the federal funds rate for the second time this year, a move analysts anticipated amid sluggish job growth, higher unemployment and stubborn inflation.
On Wednesday, the Federal Open Market Committee reduced its benchmark rate by 25 basis points to a range of 3.75% to 4.00%. Early signs point to a third rate cut this year when the committee meets again in early December.
A lower-rate environment isn’t great news for savers, who’ve been enjoying higher yields on savings accounts and CDs, but it’s a blessing for Americans climbing their way out of debt.
With back-to-back quarter-percentage-point rate cuts in September and October, debt consolidation loans can be particularly helpful to consumers struggling with credit card bills, personal loans, auto financing and other debts.
Looking to consolidate debt or make home improvements? Consider these personal loan offers.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Annual Percentage Rate (APR)
Eligible borrowers can qualify for a lower interest rate and combine multiple debts into a single streamlined monthly payment, with your lender often paying your creditors directly. In the case of an auto loan, debt consolidation also removes the risk of repossession.
Terms typically range from one to seven years, though some lenders offer longer options. A longer term means lower monthly payments, but you’ll be charged more in total interest over time. So, experts advise choosing the shortest term you can afford.
“If they can reduce any high-interest loans that they have — credit cards, personal loans or car loans — then there might be an opportunity to refinance their current loans and open up a higher monthly cash flow,” said Dana Menard, founder and lead financial planner for Twin Cities Wealth Strategies. “Or just completely eliminate debt altogether, which is always a better option.”
Struggling to pay off debt? Consider enlisting the help of a debt relief company
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Accredited Debt Relief has helped clients pay off over $3 billion in debt over the span of 13+ years. They are a great option for people with more than $20,000 in debt.
Thanks to inflation, Menard added, “a lot of debt has been brought on personal balance sheets over the last year.”
As of the second quarter of 2025, U.S. credit card debt stood at a record $1.21 trillion, an increase of $27 billion from the previous quarter.
With the average monthly car payment racing past $750, auto loan delinquencies, defaults and repossessions have also increased in recent months.
Paying off high-interest debt in a lower-rate environment should be done before putting money in savings or investing, Menard said. The average credit card interest rate, for example, is 24.19% — surpassing any gains you could expect to see in the market.
“Especially this close to the holidays, when spending starts ramping up again, it’s good to kill high-interest debt as fast as you possibly can,” Menard added.
Fed rate cut: The smart money moves for investors
Victoria Fernandez, chief market strategist at Crossmark Global Investments, says investors are now facing a high-risk bull market.
“We want to be cautious on where we invest,” she told CNBC Select. “We are looking for companies with strong cash flow, solid earnings and the ability to withstand a potential slowdown in the economy.”
Two areas Fernandez likes are big banks and the health care sector, including biotech firms. This strategy can be combined with high-yield fixed-income investments, such as U.S. Treasuries or investment-grade corporate bonds, to provide a steady cash flow.
If you’re worried about tariffs driving up inflation, Fernandez said, consider Treasury Inflation-Protected Securities (TIPS), a type of T-bond whose principal value is adjusted to keep pace with price increases.
Avoid meme stocks, junk bonds and commodities whose prices can fluctuate quickly and put money at risk, she added. Once reports begin to show improvement in jobs and inflation, you can be more aggressive.
Subscribe to the CNBC Select Newsletter!
Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.
Meet our experts
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice to help them make informed financial decisions. Every personal finance article is based on rigorous reporting by our team of expert writers and editors. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Catch up on CNBC Select’s in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
