No, a Fed cut doesn’t mean “stocks only, bonds bad”
No, a Fed cut doesn’t mean “stocks only, bonds bad.” That line sounds good on TV, but it’s not how the math, or markets, actually work. Rate cuts change the discount rate, the carry you earn on cash, and how much cushion credit has if growth slows. They reshuffle the leaderboard. They don’t crown a single winner.
Quick reality check: in 2023 and 2024, the fed funds target sat at 5.25%-5.50%, which made cash and T‑bills feel irresistible. Three‑month T‑bill yields hovered roughly in the 5.2%-5.5% range for long stretches of that period, so “do nothing and get 5%” wasn’t crazy. If the Fed trims rates in 2025, that math flips. Cash yields are the first to roll over because they reset immediately. Duration gets its bite back. Credit gets… nuanced.
Cutting rates lowers discount rates, which lifts the present value of long-duration cash flows, across both bonds and certain equity styles. That’s the mechanic, not a vibe.
Here’s the point of this section (and honestly, the whole “best-investments-if-fed-cuts-rates-2025” question): a cut shifts your hurdle rate. When the risk-free moves from ~5% to something with a 4-handle, assets with cash flows far in the future (think investment-grade bonds with longer duration and growth-y equities) get a tailwind, mathematically. A rough rule of thumb: a 1 percentage point drop in yields can lift a 10‑year Treasury (duration ~8-9 years) by about 8-9%, all else equal. Doesn’t mean it’s guaranteed, just that the sensitivity is real.
Also, cash stops paying you to wait. Money market fund assets ballooned above $6 trillion in 2023 and stayed north of that level through 2024 (ICI data), because 5% felt great with no volatility. If policy eases in 2025, that 5% disappears fastest in cash-like instruments. Your hurdle rate for taking risk comes down, which changes the opportunity set, whether you like it or not.
Credit? Not automatically safer after a cut. If the reason for easing is softer growth, spreads can widen even as Treasury yields fall. We’ve seen this movie: spreads typically compress when soft-landing odds rise and widen when recession odds rise. Sequence matters: the first cut often isn’t the last, and markets tend to front‑run policy, pricing cuts months in advance, then repricing when the growth and inflation data confirm (or don’t). That’s where mistakes happen.
- Rate cuts lower discount rates, boosting long-duration assets, both bonds and certain equity styles.
- Cash yields fall first and fastest; your hurdle rate for risk assets shifts down.
- Credit isn’t a free lunch; spreads can widen if growth slows even as base rates fall.
- Sequence matters: markets move ahead of the Fed; the first cut is a process, not a finish line.
We’ll walk through what that means for portfolios right now, duration, curve, credit quality, and the equity styles that actually benefit when the discount rate starts slipping. It’s a little messy (markets usually are), but the map is workable.
Where duration pays: bonds when yields slip
If policy eases later this year, the cleanest transmission is still fixed income. Duration finally gets its day. Quick refresher I over-explain too often: price sensitivity ≈ duration. So a bond or fund with a 6-year duration typically gains about 6% if yields fall 1% (and loses about the same if they rise). That’s the core math, imperfect in the real world because convexity nudges the result, but it’s the right mental model.
Core move: extend duration in Treasuries and high‑quality IG. On 5-7 year paper (call it 5.5-6.5 duration), a 1% drop in yields can mean mid‑to‑high single‑digit gains, ~5-7% is a fair base case; on 10-20 year (durations often 9-14), you’re looking at high single to low double digits, ~9-14% before convexity. I know, that sounds simplistic, but the arithmetic carries most of the weight in a cutting cycle and you don’t need to make it cute.
Structure it simply: a Treasuries/AGG‑style core and laddered IG corporates. Laddering across 2-7 years reduces reinvestment risk if the Fed cuts more than the market expected. For taxable investors, add high‑quality munis; mind AMT exposure on private‑activity bonds and state taxes (top federal bracket is 37% in 2025, and the 3.8% NIIT still bites higher‑income folks). The muni math can be dry, but the tax‑equivalent yield often beats corporates when you’re in those brackets.
Be selective in high yield. Spreads can widen into a slowdown even as base rates fall, which means price gains from duration get offset. Stick to BBs, focus on shorter maturities, and do the credit work, this is where active has a job. If you’re tempted to reach into single‑Bs because the coupon looks fat, remember that the spread is what moves when growth decelerates and that’s where you can give back a year’s income in a week, I’ve done it, don’t love that memory.
Floating‑rate loans lose their tailwind when policy rates fall. From 2022-2024, coupons reset higher as SOFR jumped above 5%, so loans out‑earned a lot of fixed coupons. If the policy rate drops 100 bps, loan coupons do too, carry compresses, and you’re left with below‑investment‑grade credit beta without the extra yield kicker you got last year.
Mortgages and convexity: agency MBS have negative convexity. When rates fall, prepayments speed up, your expected maturity shortens, and the duration “pop” you wanted gets whittled down. If you want the carry, fine, use diversified agency MBS funds and size it modestly, but don’t count on mortgages to behave like Treasuries in a rally. They won’t.
Curve and cash: a barbell still works. Keep short T‑bills for liquidity, 90-180 day paper lets you reload if the market overreacts, paired with intermediate Treasuries (5-7 years) for duration. This balances reinvestment risk with actual rate sensitivity. If the curve re‑steepens on cuts and soft growth, the belly tends to lead. And yes, cash will look worse the minute the first cuts hit because yields roll down first and fastest.
Equities that like cheaper money (and which to underweight)
Lower rates tend to reshuffle equity leadership. History going back to the early 1990s says the same thing almost every time: if the Fed cuts to cushion a slowdown rather than fight a crisis, duration wins first. Think 1995, 1998, 2019, non-recessionary cut windows where growth and small caps perked up as discount rates reset. Different macro backdrops, same math. 2025 is still anchored by profitable tech and the AI capex cycle, but when financing costs fall, breadth usually gets a bit better. My take? Lean into quality duration, not story stocks.
Growth and quality: lower discount rates help cash‑flow‑rich compounders. That’s not a theory, it’s present value 101. But there’s a big difference between cash‑generative growth and pre‑revenue hope. With the S&P 500’s top‑10 names still around “about a third” of index weight this year, adding selective second‑tier profitable growers balances concentration risk without abandoning what’s working. I screen for free cash flow margins >10%, net cash or net debt/EBITDA <1x, and R&D that actually converts into operating use.
Small caps: cheaper debt helps the Russell 2000 crowd because a larger share of their liabilities reprice sooner and refinancing windows matter. But quality filters are non‑negotiable in a soft‑landing cut cycle. I like positive FCF over the last 12 months, interest coverage >4x, and net debt/EBITDA <3x. Companies that term out debt in 2025-2026 at tighter spreads can see equity beta work for them instead of against them.
REITs: rate sensitive by design. One clean fact to anchor on: U.S. REITs must distribute at least 90% of taxable income, which means balance sheet discipline and the cost of capital matter a lot. I’d skew to sectors with pricing power, data centers riding AI demand and modern industrial/logistics. I’d underweight levered retail and legacy office unless there’s a clear catalyst (asset sales, redevelopment, or real balance sheet repair). Over the years I’ve learned the hard way: cap rate optimism doesn’t fix a 7x net debt/EBITDA problem.
Cyclicals vs defensives: if cuts are cushioning slower growth, overweight quality cyclicals (clean balance sheets, variable cost structures) in autos suppliers, select semis, machinery with aftermarket revenue. Still keep some defensives, staples and utilities, for earnings resilience if top‑line decelerates. I know it sounds like threading a needle. It is.
International: if the dollar eases as U.S. short rates step down, developed ex‑US and select EMs can catch a bid. The FX piece matters: hedging costs mostly track short‑rate differentials, so a 100 bp drop in U.S. policy rates tends to lower USD hedging carry by ~1% annualized for euro/yen investors. In 2025, policy divergence is real, BoE and ECB are on their own glide paths, so decide explicitly whether you want the currency in the trade.
Income equities: dividend “bond proxies” re‑rate when yields fall, but don’t chase 7% yields with 120% payout ratios. I want utility and pipeline names with sustainable payout ratios (60-75% of earnings or AFFO, depending on the sector) and no 2025-2026 refinancing cliffs. One last nit: balance sheets first, yield second. Every time I’ve flipped that order, I’ve regretted it.
Underweights for me right now: unprofitable small‑cap biotech, over‑levered REITs without catalysts, and deep cyclicals with thin coverage. Overweights: profitable growth, quality small caps, data‑center/industrial REITs, and a barbell of quality cyclicals plus core defensives.
Cash, CDs, and your “5% savings” reality check
Cash was fantastic when policy was tight. But if the Fed trims rates later this year, the 4-5% APYs you’re seeing on high‑yield accounts and money funds won’t hang around. They reset fast. Money market funds quote a 7‑day yield for a reason, they reprice with the policy rate in days, not months. Quick history check: after the March 2020 emergency cuts, prime and government MMF 7‑day yields fell from roughly 1.5-2.0% to ~0.1% by May 2020 (ICI data at the time). Different backdrop today, sure, but the mechanism is the same.
Two housekeeping notes while we’re here:
- APYs will move quickly. Banks and brokerages adjust within statement cycles. In 2024, the FDIC’s national average savings rate was still under 0.5% while dedicated money funds were north of 5%, the point being: posted rates lag up and down, but MMFs track policy fastest.
- Sweeps vs. dedicated cash. Broker “sweep” rates historically trail by a mile. In 2024, many sweeps paid 0.01-0.25% while retail government MMFs paid 4-5%+. Don’t leave idle cash in the sweep if you can use a dedicated MMF or T‑Bills instead. That spread is real money.
So what do you actually do? I wouldn’t abandon liquidity, just plan the migration path.
- Keep your emergency buffer untouched. Whatever your number is (3-6 months of expenses for most), park it in a government MMF or a high‑yield savings account. Speed matters more than squeezing 15 extra bps. When life happens, you’ll be glad it’s simple.
- Shift a slice into short‑term bond funds. 1-3 year core or gov/credit funds give you carry with modest duration (call it ~1.8-2.5 years). Historically, they’ve earned 50-150 bps over cash across cycles, with drawdowns that are manageable. Yes, there’s mark‑to‑market risk, but if cuts unfold, that duration helps a bit.
- CD ladders: let high rungs roll off. If you locked 12‑month CDs at 5%+ last year, great, just let them mature. I’d be cautious locking 3-5 years right as rates are rolling over unless you truly need certainty. A simple 6/12/18/24‑month ladder keeps reinvestment optionality alive.
- Brokered CDs vs. Treasuries, run the after‑tax math. Treasury interest is exempt from state and local taxes; CDs aren’t. Example: at a 5.0% Treasury and a 5.2% brokered CD, a California investor at 9.3% state tax and 32% federal ends up with roughly 3.4% after‑tax on the Treasury vs ~3.2% on the CD. At higher state brackets, the gap widens. The pretax winner isn’t always the take‑home winner.
One more thing I should have mentioned earlier: money fund compositions matter. Government MMFs own T‑Bills and repo that reset constantly; prime funds add credit risk. When cuts start, the 7‑day yield compresses either way, but credit spreads can wiggle. I still lean government funds for core cash right now, I don’t need basis‑point drama in my liquidity sleeve.
Two quick tactical ideas I use in client accounts (and yes, in my own):
- Tiered cash. 1-2 months in an FDIC account for bill‑pay, next 4-10 months in a government MMF or rolling 4-13 week T‑Bills, and anything beyond that migrates into a 1-3 year bond fund sleeve. It ain’t fancy, but it works.
- Watch your defaults. Many brokerages default to a low‑yield sweep. Manually pick a higher‑yield government MMF ticker or set a recurring T‑Bill purchase. Don’t assume the platform optimizes this for you. It usually doesn’t.
Final perspective: in 2024, ICI reported money market fund assets over $6 trillion, people embraced cash for good reasons. Just remember, when policy rates slip, the cash yield party ends first. Liquidity stays; the 5% doesn’t. We’ll get back to TIPS in a minute, but for now, set your glidepath off the cash peak while spreads and short duration still pay you to wait.
Refi the liabilities: the highest‑confidence “return” you’ll find
Rate cuts aren’t just an asset story; they’re a gift to the right side of your balance sheet. I locked a 30‑year with a 2‑handle back in 2020, hands down the best financial move I made that decade. You don’t need 2020’s bottom to make the math work now. Here’s how I actually think this through, messy scratchpad and all.
Mortgages, HELOCs, auto: run the math, not the vibes. Start with a simple break‑even: estimated closing costs divided by monthly payment savings. If you’ll stay past that month count, you’re good. Example: $4,000 in refi costs, $160/month savings = 25‑month break‑even. Planning to stay 5+ years? That’s a green light. Over‑explain moment: yes, you reset the amortization clock if you go back to 30 years. If that bugs you, price a 20‑year or 15‑year, payments jump, interest cost falls, break‑even usually still works if the rate drop is real. And no, you don’t need a 2.75%. Even a 50-75 bps drop can be enough if you’re carrying a big balance. For context, Freddie Mac’s weekly survey put the all‑time low 30‑year mortgage rate at 2.65% in January 2021 (data point worth remembering). We’re not there, obviously, but the spread between your note rate and today’s quotes is what matters, not nostalgia.
Floating to fixed, lock where it fits your cash flow. HELOCs and variable student loans reprice quickly with policy moves. Rule of thumb I use with clients: every 25 bps cut tends to flow 1:1 to HELOCs because they’re tied to Prime, which tracks fed funds. If your HELOC rate is finally coming down, great, use the window to price a fixed‑rate cash‑out refi or a HELOC term‑out option so you’re not whipsawed next cycle. Same idea for autos: if your note is at a pandemic‑era 2-3%, leave it alone. If you’re sitting on a 7-9% auto from late 2023/early 2024, check refi quotes; fees are usually lighter than a mortgage, and a modest rate cut can make the math pencil fast.
Small business owners, watch the 2025-2026 wall. If you have a term loan or revolver maturing in the next 12-24 months, this year’s spread backdrop is friendly for now. Extend maturities and refinance before credit spreads wake up again. Clean covenants help you negotiate: keep use in range, file on time, avoid ad‑hoc add‑backs that spook the credit team. I’m telling clients: don’t get cute, price a 3-5 year deal while lenders are still receptive, even if you think another 25-50 bps is coming later this year. Optionality is worth more than nickels on rate.
Margin loans and securities‑backed lines (SBLs): reduce rate, tighten risk. These float off SOFR/EFFR plus a spread. Use cuts to re‑term or move to a lower spread tier if your custodian offers it. Then set hard guardrails: max loan‑to‑value, stress‑tested maintenance margin, and an automatic delever plan at pre‑set drawdown levels. Yes, write it down, saves you from forced selling on a -15% week. Quick mental math: a 50 bps reduction on a $500k SBL balance saves ~$2,500/year. Nice, but not if you puke stock at the lows because there was no risk protocol.
One last perspective check. Liquidity has been the comfort blanket. In 2024, ICI reported money market fund assets over $6 trillion, people voted with their feet and parked cash. That same impulse can help your liabilities: as rates ease, refinance windows open first on floating loans, then in fixed quotes. Don’t overthink perfection. Take the A‑ minus refi you can get while it’s available, not the imaginary A+ that may never show up.
Tactics for a cutting cycle: how to position without guessing the dot plot
You don’t need the exact month of every cut. You need a playbook that works if the landing is soft-ish or a little bumpy. 2025 is a transition year, shift from hoarding cash to being intentional about duration and balance‑sheet quality. Quick context: in 2024, ICI showed money market fund assets above $6 trillion. That tells you how crowded the cash trade got. As the Fed eases this year, that cash drag matters more each quarter.
- Stage into duration. Add in thirds across 3-12 months. One third now, a third if/when the curve steepens on early cuts, and the last third on a pre‑set yield trigger (e.g., add to 7-10yr if the 10yr backs up +20-30 bps). Avoid the all‑at‑once hero trade. Bond math reminder: a 7-10yr Treasury ladder typically carries a duration around 7-8; a 50 bp move is roughly a 3.5-4% price swing. Plenty, and you want room to average, not chase. And I’ll say it again later because it matters: do it in stages.
- Curve view. Early cuts often bull‑steepen as 2s rally faster than 10s. I prefer neutral 2s/10s with modest 7-10yr exposure first, then reassess after the first 50-100 bps of easing. History backs this pattern: during prior cutting windows, front‑end yields typically fall the most in the first leg while long bonds lag and then catch up when growth slows. You don’t need to time the inflection; just don’t be max long 30s on cut #1.
- Keep the credit bar high. Favor rising stars over fallen angels. Investment‑grade and strong BB/BBB names with deleveraging paths. Be stingy with CCCs, if you must, size tiny and diversify across issuers and sectors. For perspective, Moody’s 2023 Annual Default Study reports a long‑run average 1‑year default rate of roughly 26% for CCC/C credits versus about 1% for BBB. That gap is real, and it shows up right when liquidity tightens or growth wobbles.
- Use tax tools the right way. It’s the 2025 tax year, plan inside the year you’re in. If you’re sitting on gains in bonds after the first leg of cuts, think about realizing selectively to reset lots while keeping duration via ETFs or a near‑identical CUSIP (mind wash sale rules for funds too). In taxable accounts, after‑tax can flip the scoreboard: at a 37% top federal bracket (plus 3.8% NIIT where applicable), a 3.5% national muni is ~5.9% tax‑equivalent, which can beat a 5% corporate after tax depending on state. Treasuries are state tax‑free, which helps if you live in CA/NY, etc. Write the TEY on a sticky note; it keeps you honest.
- Risk controls that let you sleep. Pair equity beta with hedges sized to your nerves, not your ambition. Index puts or put‑collars on your core equity sleeve, laddered quarterly. The goal is to cushion a -10% air‑pocket, not to nail the bottom or turn the book into a hedge fund. If carry bugs you, consider financed collars or overwriting a slice of your winners. Small, systematic, boring.
- Rebalance rules you pre‑commit to. Set 5% bands around your target weights so you’re buying what fell and trimming what ran. No debate mid‑drawdown, just execute. I’ve blown this myself by over‑thinking the “macro.” The bands would’ve done better. If you’re using an SBL or margin line, include a use band too, with an auto‑delever rule you actually follow.
And circling back to duration because I can hear the “should I wait for the first cut?” question, don’t anchor on the meeting date. Stage in. If we get a soft landing, carry + roll‑down on 5-10yr paper should still pay you. If growth stumbles, the added duration does the heavy lifting. Either way, cash won’t keep up as policy rates glide lower.
One more stat that helps frame the bias toward quality: S&P’s 2024 credit trends showed upgrades outpacing downgrades in the investment‑grade bucket while the lowest tiers saw rising distress ratios late last year. That pattern tends to widen when policy is easing into late‑cycle conditions. Translation: stay up the stack until spreads fully price the risk.
Bottom line for 2025: less cash drag, more intentional 7-10yr duration, higher credit quality, and rules that trade for you when you’re tempted to outsmart the calendar. And if you’re unsure, write the plan, size the moves, then let the tape come to you… not the other way around.
Big picture: rate cuts are a setting, not the strategy
Big picture: rate cuts are a setting, not the strategy. Cheaper money helps, sure, but it isn’t a plan. Your plan is the dull stuff that works: allocation that matches your timeline, cash‑flow mapped to real bills, taxes handled on purpose, and behavior that doesn’t panic when the tape gets loud. Use the 2025 shift as a window to tidy up: extend duration where it fits, raise quality, refinance liabilities, and leave some dry powder for the weird days. That’s compounding. Boring, repeatable, hard to screw up if you actually stick with it. Honestly, that’s the whole game.
Start with time horizon. If a goal is 7-10+ years out, you can own more duration and let rates work for you over the cycle. For context, the Bloomberg U.S. Aggregate Bond Index ran with a duration around ~6.2 years in 2024 (index data), and the Bloomberg U.S. Corporate IG Index was closer to ~7.4 years. Rule of thumb: a 1% move in yields changes price roughly by duration. So if the long end drops 100 bps over a year, a 7‑year duration sleeve adds ~7% in price gains before carry. For money you actually need in the next 12-24 months? Liquidity trumps. Bills, T‑bills, short ladders, and cash-like vehicles. No heroics.
Quality over stretch, especially when the cycle is turning. We saw this movie. In the 2020 shock, U.S. high yield sold off roughly ~20% peak‑to‑trough while investment‑grade drawdowns were closer to high single digits before the market stabilized (index history). And S&P’s 2024 credit trends showed upgrades outpacing downgrades in investment grade while distress rose at the lower tiers late last year. That gap usually widens when policy is easing into a late‑cycle slowdown. Translation: balance sheets, cash flows, and sensible valuations matter more than that extra 150 bps in yield that looked cute in a backtest.
Refinance and simplify. You don’t need a perfect macro call to save real dollars:
- Mortgage math: dropping a $500,000 balance from 6.75% to 5.75% trims the payment by roughly $320/month on a 30‑year, about $3,800 a year, before taxes. That’s a free raise.
- Small‑biz lines and HELOCs: even a 75 bps cut off a $250,000 floating balance saves ~$1,875 per year. Lock where it makes sense.
- Bank clutter: FDIC’s national average savings rate sat around 0.46% in 2024, while competitive high‑yield savings paid 4%+. Moving idle cash is low drama, high impact.
Yes, macro matters… but be humble about it. No one nails the exact path, not consistently. Process and sizing beat prediction. For me that means pre‑set bands, scheduled rebalances, and limits on any single “view” so one bad call doesn’t wreck the year. Same point, slightly differently: don’t make portfolio‑level bets with trade‑level conviction.
Align moves with your time horizon. Use duration for long goals, liquidity for near‑term needs. Favor quality when the cycle turns. Refinance liabilities and simplify accounts whether markets go up or down. And keep some dry powder for dislocations.
One last nuance because it’s easy to overthink this: you’re not trying to max every basis point; you’re trying to compound with the least drama. As policy rates glide lower this year, be intentional, extend duration sensibly, stay up the quality stack until spreads pay you, harvest refinancing savings, and write down the rules you’ll follow when volatility shows up. It’s simple. It’s boring. And it works.
Frequently Asked Questions
Q: How do I adjust my portfolio if the Fed cuts rates later this year?
A: Quick hits: trim excess cash, add some duration (ladder 2-7 years, keep a sleeve in 10-year IG), favor investment‑grade over low‑quality credit, keep equity tilts balanced (not just mega‑growth), and mind taxes, munis in taxable, Treasuries in IRAs. Revisit your emergency fund and refinancing options, too.
Q: What’s the difference between holding cash, short‑term bonds, and longer‑duration bonds when rates start falling?
A: Cash resets first. In 2023-2024, T‑bills around 5.2%-5.5% were an easy hold, but if the policy rate slips to a “4‑handle,” your money market yield will follow quickly. Short‑term bonds (1-3 years) offer modest yield pickup with limited price movement, think low duration, low drama. Longer‑duration bonds (7-10+ years) are where the rate‑cut math matters: a ~1% drop in yields can lift a 10‑year Treasury by roughly 8-9%, all else equal. That’s your convexity kicker. Reinvestment risk flips, too: with cuts, you want to lock in decent yields before they drift down. Practical take: keep 3-6 months in cash, park near‑term spending in short duration, and use a measured slice of longer duration to benefit from falling yields without turning the whole portfolio into a bond trampoline.
Q: Is it better to buy growth stocks or investment‑grade bonds if the Fed trims rates?
A: Both can benefit, but in different ways. Lower discount rates boost the present value of long‑dated cash flows, good for growth equities and longer IG bonds. Bonds give you cleaner math: duration-led price gains plus known coupons. Stocks carry valuation and earnings path risk; if growth slows alongside cuts, multiples can expand while earnings wobble, messy combo. Time horizon drives the call. Money needed in 3-5 years? Favor IG bonds and a ladder (2-7 years) to control sequence risk. Longer horizon and higher risk tolerance? Keep a balanced equity sleeve, not just mega‑cap growth, mix quality, cash‑flow‑positive names. Tax angle matters: munis for high‑bracket taxable accounts; Treasuries/IG corporates inside tax‑advantaged. Personally, I’m nudging portfolios from “cash heavy” to a barbell: core IG duration plus a sane allocation to quality growth, not either/or.
Q: Should I worry about my money market fund if yields drop?
A: A bit, yes, mainly about opportunity cost. Money market assets topped $6T in 2023 and stayed north of that in 2024 (ICI data) because ~5% with no volatility felt great. If the Fed eases in 2025, those yields usually fall first. Example: $100,000 at 5% earns ~$5,000/year; at 3.5%, it’s ~$3,500. You’re not losing principal, but your hurdle rate for taking risk just moved down. What to do: • Keep 3-6 months of expenses in cash, no debate. • Map spending: 0-2 years in T‑bills/ultra‑short; 2-7 years in a ladder of Treasuries/IG corporates to lock today’s yields; beyond 7 years, consider core bond funds with moderate duration and some equities. • Tax check: in high brackets, evaluate short‑intermediate munis for taxable accounts. • Credit sanity: if spreads are tight, avoid reaching into high yield to “replace” lost cash yield. Anecdotally, earlier this year I shifted a chunk from a prime MMF into a 2-5 year Treasury ladder. Boring? Yep. But if policy rates slide 75-100 bps, I’ve pre‑locked income and left cash for true liquidity. That’s the whole point of the reshuffle, minimize regret while rates reset.
@article{best-investments-if-the-fed-cuts-rates-in-2025,
title = {Best Investments if the Fed Cuts Rates in 2025},
author = {Beeri Sparks},
year = {2025},
journal = {Bankpointe},
url = {https://bankpointe.com/articles/best-investments-fed-cuts-2025/}
} 