Should I Open a CD Now Before the Next Fed Meeting?
The Federal Reserve has been highly predictable for the last few years thanks to Covid and a brittle economy, but high inflation changed the game. Now knowing if you should open a CD before the next Fed meeting is a little trickier. However, this Fed hasn’t changed its stripes and predicting the Fed’s moves in the short term is still easy enough to make decisions with your money. Should I Open a CD If the Fed Is Raising Interest Rates? If you bought a 5-year CD paying 1.45% a year or two ago, that probably feels like a bad move buying a CD. Don’t feel too bad you aren’t the only ones. Professional asset managers bankrupted a favorite Silicon Valley stock by buying long-term treasuries when they were paying pennies. Like you, they took what they could get. Ideally, you want to wait until the Fed raises interest rates before buying a CD. Higher rate CDs mean more interest for you. However, you have to remember about opportunity cost. Opportunity cost is the value of what you could have been doing with your money while you were doing something else, like waiting for the Fed to raise interest rates. That …