3 Big Money Moves To Make With Fed Rate Hikes Still Paused

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The May inflation report , released today, offers a glimmer of hope to the millions of Americans who are weary of rising prices. While the drop was slight, the report shows that the inflation rate fell month-over-month, declining from 3.4% in April to 3.3% in May. And, that decrease was enough to prompt the Federal Reserve to keep interest rates unchanged at its June meeting.

The Fed has opted to keep rates frozen at 5.25% to 5.50% for nearly a year now to try and fight back against persistent inflation. Many experts predicted at the start of 2024 that the Fed would start slashing rates mid-year , but inflation improvements have been slower than expected. In turn, the Fed has held on the anticipated rate cuts in exchange for a more aggressive strategy.

There's always a chance that rate changes could occur in the future, though. For example, the Fed could opt to hike rates if inflation starts to tick back up again. But if inflation drops substantially over time, the Fed could cut rates in tandem. With the Fed rate hikes remaining paused for now, what big money moves should you make as a result?

For example, many major banks and financial institutions offer short-term CDs with rates that surpass 5.5% currently. That's a hefty rate in general but is over 10 times higher than the average savings account rate, which is just 0.45% currently . So if you're looking to maximize your earnings, finding the right short-term CD account makes sense.

CDs aren't the only interest-bearing accounts that offer top rates right now. There are also favorable rates being offered on certain types of savings accounts, like high-yield savings accounts .