Here Are the Latest Interest Rate Predictions for 2024 -- And What They Mean for Your Bank Accounts

Motley Fool06-21

KEY POINTSThere's no way to predict interest rates with certainty.The Federal Reserve policymakers as well as investors both agree that the next interest rate move is likely to be lower.Bank account ...

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But here's what the policymakers and stock market are telling us.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4585":"ETF&股票定投概念","CD":"秦淮数据","LU1861217088.USD":"贝莱德金融科技A2","LU1861220207.SGD":"Blackrock FinTech A2 SGD-H","LU0648000940.SGD":"Natixis Harris Associates Global Equity RA SGD","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","BK4077":"互动媒体与服务","BK4166":"消费信贷","FOMC":"FOMO CORP.","BK4116":"互联网服务与基础架构","BK4588":"碎股","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","LU0130103400.USD":"Natixis Harris Associates Global Equity RA USD","LU1201861165.SGD":"Natixis Harris Associates Global Equity PA SGD","COF":"第一资本","LU1201861249.SGD":"Natixis Harris Associates US Equity PA SGD-H","LU0211331839.USD":"FRANKLIN MUTUAL GLB DISCOVERY \"A\" (USD) ACC","LU0980610538.SGD":"Natixis Harris Associates US Equity RA SGD-H","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","BK4516":"特朗普概念"},"translate_title":"以下是2024年最新的利率预测——以及它们对您的银行账户意味着什么","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CD":1,"FOMC":1,"US10Y.BOND":0.9,"US12M.BOND":0.9,"US2Y.BOND":0.9,"US30Y.BOND":0.9,"US3Y.BOND":0.9,"US7Y.BOND":0.9,"US6M.BOND":0.9,"US5Y.BOND":0.9,"COF":0.78,"US912797FS14.BOND":0.6,"US912797GB79.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6},"content_text":"KEY POINTSThere's no way to predict interest rates with certainty.The Federal Reserve policymakers as well as investors both agree that the next interest rate move is likely to be lower.Bank account interest rates don't directly depend on the Fed's moves, but they tend to move in the same direction.Check out our pick for the best cash back credit card of 2024High-yield savings accounts and CDs are offering the highest interest rates that consumers have seen in years. This is mainly due to the inflationary environment and the benchmark interest rate hikes the Federal Reserve has implemented to help combat it.While there's no way to know exactly where interest rates will be in a few months or a year from now, we can look at projections to get an idea of where things might be heading. Here's what the latest data is telling us.Where will interest rates go from here?To be perfectly clear, nobody knows for sure what direction interest rates will head next -- not even the people who decide on monetary policy. But we can use some estimates to get a good idea of where they're going.First, the Federal Open Market Committee (FOMC), which is the policy-making arm of the Federal Reserve, issues its own economic projections four times per year. Its latest projections were recently released at the conclusion of the June FOMC meeting, and gave the following expectations:Our Picks for the Best High-Yield Savings Accounts of 2024SoFi Checking and SavingsAPYup to 4.60%Rate infoCircle with letter I in it.You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.Min. to earn$0Open Account for SoFi Checking and SavingsMember FDIC.APYup to 4.60%Rate infoCircle with letter I in it.You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.Min. to earn$0CIT Platinum SavingsAPY5.00%Rate infoCircle with letter I in it.5.00% APY for balances of $5,000 or more; otherwise, 0.25% APYMin. to earn$5,000Open Account for CIT Platinum SavingsMember FDIC.APY5.00%Rate infoCircle with letter I in it.5.00% APY for balances of $5,000 or more; otherwise, 0.25% APYMin. to earn$5,000Capital One 360 Performance SavingsAPY4.25%Rate infoCircle with letter I in it.See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.Min. to earn$0Open Account for Capital One 360 Performance SavingsMember FDIC.APY4.25%Rate infoCircle with letter I in it.See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.Min. to earn$0Just one quarter-percent rate cut by the end of 2024. However, eight of the 19 voting members anticipate two rate cuts, while four don't expect any.Four rate cuts (a total of 1 percentage point) in 2025.Another four rate cuts in 2026. This would bring the target federal funds rate from a range of 5.25%-5.50% currently to 3.00%-3.25% by the end of 2026.Another widely followed source of interest rate expectations is the CME Group's FedWatch tool, which in simple terms tells us the interest rates that investors are pricing into the stock market. And this tells a bit of a different story:A median expectation of two quarter-percent rate cuts by the end of 2025.A total of four rate cuts by September 2025 (the latest meeting date projected by the tool).So the key takeaway is that nobody knows for sure. But it's important to point out that the general consensus is that the next interest rate movement will be downward. None of the 19 voting members of the FOMC are projecting benchmark rates to rise any further in 2024, and the FedWatch tool doesn't see this as a realistic possibility, either.What does this mean for your bank accounts?The interest rates paid on bank deposit accounts such as savings accounts and certificate of deposit (CD) accounts are not directly dependent on benchmark interest rates. In other words, just because the Federal Reserve cuts the federal funds rate by 0.25% doesn't necessarily mean your bank will lower its rates by the same amount.However, it's important to note that Federal Reserve rate moves and bank interest rates tend to move in the same direction. So, the most likely course of events is that the interest rates paid by your high-yield savings accounts and CDs will be slightly lower than they are now, but falling a little faster throughout 2025 and 2026. However, nothing is certain, and there are a lot of moving parts that could affect the future of interest rates.These savings accounts are FDIC insured and could earn you 11x your bankMany people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.24.2","shortVersion":"4.24.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2445750878"}