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NEWS & MARKETS Β· Lesson 8

What "the Fed cut rates" actually does to your savings account

Daily Desk Β· Editorial5 min read
Banks pass rate cuts to depositors immediately. They pass rate cuts to borrowers slowly. The asymmetry is the business model.

When the Federal Reserve cuts the federal funds rate, the rate at which banks lend to each other overnight, every other rate in the economy adjusts. But not at the same speed. Money you've given a bank reprices fast. Money you've borrowed from a bank reprices slowly.

β€” Educational, not financial advice.

What "the Fed cut rates" actually does to your savings account β€” The Daily Capital