Inflation remains relatively high at 3.4%, higher than the Federal Reserve's target rate. To achieve its goal of lower inflation, the Fed opted to keep the federal funds paused at the same rate at last month's meeting. As a result, interest rates for borrowing products, like auto loans and home loans, will remain high — at least until the Fed's next meeting.
'If the Fed lowers their benchmark federal funds rate , it could cause CD rates for just about every term under five years to fall,' says Diodato. However, he believes it's harder to predict the direction of CDs with terms over five years. 'Longer-term CDs are influenced by interest rate changes, but are also determined by factors, such as long-term inflation and economic growth expectations, which the Fed doesn't directly control,' Diodato says.