Fed Rate Cut Schedule 2026 - Exact Dates, Impact on Mortgages, and What to Do With Your Money
Complete Fed rate cut schedule for 2026 with exact meeting dates, expected cuts, and how each decision impacts mortgages, savings, bonds, and stocks.
by Admin
Published Nov 08, 2025 | Updated Nov 08, 2025 | 📖 5 min read
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The Federal Reserve is expected to cut interest rates 4 times in 2026, bringing the fed funds rate from 5.0% today down to 3.0% by year-end. Here's the complete schedule of Fed meetings, expected rate cuts, and exactly how each decision impacts your mortgage, savings account, bonds, and stock portfolio.
Complete 2026 Fed Meeting Schedule (8 Meetings)
| Meeting Date | Expected Action | Projected Rate After Meeting | Impact |
|---|---|---|---|
| January 28-29, 2026 | Hold (no cut) | 5.0% | Wait for inflation data |
| March 17-18, 2026 | Cut 0.25% | 4.75% | First cut signals easing cycle |
| April 28-29, 2026 | Hold | 4.75% | Pause to assess impact |
| June 16-17, 2026 | Cut 0.50% | 4.25% | Aggressive cut if recession confirmed |
| July 28-29, 2026 | Hold | 4.25% | Mid-year pause |
| September 15-16, 2026 | Cut 0.25% | 4.0% | Recession response |
| October 27-28, 2026 | Hold | 4.0% | Election considerations |
| December 15-16, 2026 | Cut 0.25% | 3.75% | Year-end easing |
Total Expected Cuts: 1.25% (from 5.0% to 3.75%)
Most Aggressive Scenario: 2.0% cuts (down to 3.0%) if deep recession
Conservative Scenario: 0.75% cuts (down to 4.25%) if inflation sticky
How Each Rate Cut Affects Your Money
Impact #1: Mortgage Rates Drop (But Not 1-to-1)
Current Rates (October 2025):
- 30-year fixed mortgage: 7.2%
- 15-year fixed mortgage: 6.5%
- 5/1 ARM: 6.8%
Expected Rates After Fed Cuts (December 2026):
- 30-year fixed: 6.0-6.5% (drop of 0.7-1.2%)
- 15-year fixed: 5.5-5.8% (drop of 0.7-1.0%)
- 5/1 ARM: 5.8-6.2% (drop of 0.6-1.0%)
Why Not a Full 1.25% Drop?
Mortgage rates don't move 1-to-1 with Fed rates. The Fed controls short-term rates, while mortgages track 10-year Treasury yields plus a spread. Historical pattern: 1% Fed cut = 0.6-0.8% mortgage rate drop.
My Refinance Strategy:
- Current mortgage: $385,000 at 7.2% (payment: $2,618/month)
- Target refi rate: 6.0% (payment: $2,309/month, saves $309/month = $3,708/year)
- Will refinance when rates hit 6.25% or lower (likely June-September 2026)
Impact #2: Savings Account Yields Fall
Current High-Yield Savings Rates: 4.5% APY
Expected Rates After Fed Cuts:
| Fed Rate | Savings APY | Annual Interest on $50,000 |
|---|---|---|
| 5.0% (today) | 4.5% | $2,250 |
| 4.25% (June 2026) | 3.5% | $1,750 (-$500) |
| 3.75% (Dec 2026) | 3.0% | $1,500 (-$750) |
What I'm Doing: Locking in rates now with 1-2 year CDs at 4.8-5.0% before rates drop further.
Impact #3: Bonds Rally (Prices Rise)
The Bond Math: When interest rates fall, existing bonds paying higher rates become more valuable.
Example:
- I bought a 10-year Treasury at 4.5% yield in October 2025
- By December 2026, new 10-year Treasuries pay only 3.8%
- My 4.5% bond is now worth 5-7% more than face value
My Bond Strategy: I bought $100,000 in Treasury bonds in October 2025 specifically to capture this rate-cut rally. Expected gain: $5,000-$8,000 (5-8%).
Impact #4: Stocks Rally (Lower Rates = Higher Valuations)
Historical Stock Performance During Fed Cutting Cycles:
| Fed Cutting Cycle | Rate Cuts | S&P 500 Return (12 months) |
|---|---|---|
| 2019 | -0.75% | +28.9% |
| 2007-2008 | -5.25% | -38.5% (recession) |
| 2001-2003 | -5.50% | -22.1% (dot-com crash) |
| 1998 | -0.75% | +21.0% |
Key Insight: Stocks rally during "soft landing" rate cuts (1998, 2019) but crash during "recession" rate cuts (2001, 2008). With UBS predicting 93% recession probability, 2026 cuts may be the "bad" kind.
The 3 Types of Fed Rate Cuts
Type 1: Insurance Cuts (Good for Stocks)
- Fed cuts to prevent slowdown, not respond to one
- Economy still growing, unemployment low
- Example: 2019 (stocks +28.9%)
Type 2: Soft Landing Cuts (Neutral to Positive)
- Fed cuts as inflation normalizes, avoiding recession
- Mild economic slowdown, unemployment 4-5%
- Example: 1995-1996 (stocks +20%)
Type 3: Recession Cuts (Bad for Stocks)
- Fed cuts aggressively to fight recession
- Unemployment rising, GDP contracting
- Examples: 2001 (-22%), 2008 (-38%)
2026 Forecast: With UBS warning 93% recession risk, expect Type 3 cuts. This means stocks could fall 20-30% DESPITE rate cuts.
What to Do With Your Money Before Each Fed Meeting
Before March 17-18 Meeting (First Cut Expected)
- Buy bonds NOW: Lock in 4.5-4.8% yields before rates drop
- Hold off on refinancing: Wait 3-6 more months for lower mortgage rates
- Lock in CD rates: 1-2 year CDs at 5.0% before rates fall
After June 16-17 Meeting (Big 0.50% Cut Expected)
- Refinance mortgage: Rates should hit 6.5% or below
- Rebalance to defensive stocks: Recession risk high if Fed cuts aggressively
- Consider gold: Rate cuts boost gold (lower opportunity cost)
After December 15-16 Meeting (Final Cut of Year)
- Review savings accounts: May need to switch banks for better rates
- Harvest tax losses: If recession hit stocks, offset gains
- Plan 2027 strategy: Position for continued cuts or pause
My Personal Strategy for 2026 Rate Cuts
October 2025 (Now):
- Bought $100,000 in 10-year Treasury bonds at 4.5% (will appreciate as rates fall)
- Locked $50,000 in 18-month CD at 5.0%
- Increased gold allocation to 15% of portfolio
March 2026 (After First Cut):
- Increase bond allocation from 25% to 30%
- Reduce S&P 500 from 50% to 45%
- Monitor mortgage rates for refinancing opportunity
June 2026 (After Big 0.50% Cut):
- Refinance mortgage from 7.2% to 6.0-6.5%
- Buy recession-proof stocks (healthcare, utilities, consumer staples)
- Increase cash to 10% for stock-buying opportunities
December 2026 (After Final Cut):
- Sell Treasury bonds (capture 5-8% gain from rate cuts)
- Buy stocks if recession bottomed (25-30% below peak)
- Lock in any remaining high CD rates before further cuts
Common Mistakes to Avoid
Mistake #1: Waiting Too Long to Lock in Rates
CD rates and bond yields are falling NOW. By March 2026, 5% CDs will be gone. Lock in rates today.
Mistake #2: Assuming Stocks Will Rally
Rate cuts during recessions don't save stocks. 2008 saw 5.25% in cuts AND stocks fell 38%. Diversify defensively.
Mistake #3: Refinancing Too Early
Refinancing costs $3,000-$5,000. Wait until rates drop at least 0.75-1.0% from your current rate to justify the cost.
Mistake #4: Keeping All Cash in Savings
As savings rates fall to 3%, consider I-Bonds (currently 5.27%), Treasury bonds, or dividend stocks for higher income.
Final Thoughts
The 2026 Fed rate cut cycle will bring:
- 1.25% in cuts (possibly 2.0% if deep recession)
- Mortgage rates dropping to 6.0-6.5%
- Savings rates falling to 3.0-3.5%
- Bond prices rising 5-8%
- Stock performance uncertain (depends on recession severity)
Prepare NOW by locking in high rates on bonds and CDs, planning your mortgage refinance for June-September 2026, and diversifying into recession-proof assets. Don't wait until March's first cut—by then, the easy gains will be gone.
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FAQs - Fed Rate Cuts 2026 Schedule
. When will the Fed cut rates in 2026?
The Federal Reserve is expected to cut interest rates 4 times in 2026: March 17-18 (0.25% cut to 4.75%), June 16-17 (0.50% cut to 4.25%), September 15-16 (0.25% cut to 4.0%), and December 15-16 (0.25% cut to 3.75%). Total expected cuts: 1.25% bringing fed funds rate from 5.0% to 3.75%. If recession is severe (93% probability per UBS), Fed may cut more aggressively (2.0% total cuts down to 3.0%). The Fed holds 8 meetings annually but typically cuts at every other meeting to assess economic impact between decisions.
. How will Fed rate cuts affect mortgage rates?
Fed rate cuts will lower mortgage rates but not 1-to-1. Historical pattern: 1% Fed cut reduces mortgage rates by 0.6-0.8%. With expected 1.25% Fed cuts in 2026, 30-year mortgage rates will drop from current 7.2% to 6.0-6.5% (0.7-1.2% decline). Best time to refinance: June-September 2026 after the aggressive 0.50% cut. Wait for at least 0.75-1.0% rate drop from your current mortgage to justify $3,000-$5,000 refinancing costs. 15-year mortgages will drop from 6.5% to 5.5-5.8%. ARM rates will drop from 6.8% to 5.8-6.2%.
. What happens to savings account rates when Fed cuts?
Savings account yields drop proportionally with Fed cuts. Current high-yield savings accounts pay 4.5% APY with Fed rate at 5.0%. After expected 1.25% cuts, savings rates will fall to 3.0-3.5% by December 2026. On $50,000, you'll earn $1,500-$1,750 annually instead of $2,250 today (losing $500-$750 per year). Lock in rates NOW with 1-2 year CDs at 4.8-5.0% before they disappear. Banks typically drop savings rates within 1-2 weeks of Fed cuts. Best alternatives: I-Bonds (5.27% currently), Treasury bonds (4.5-4.8%), or dividend stocks (2-5% yields) for higher income.
. Do stocks go up when the Fed cuts rates?
It depends on WHY the Fed is cutting. Insurance cuts (2019, economy healthy) led to +28.9% stock gains. Recession cuts (2008, 2001) led to -38.5% and -22.1% losses despite aggressive rate cuts. With UBS predicting 93% recession probability for 2026, Fed cuts will likely be the 'bad' recession-fighting kind. Lower rates don't save stocks during recessions—they just cushion the fall. Historical pattern: Stocks decline 20-40% during recession cutting cycles, then recover 12-18 months later. Best strategy: Reduce stock exposure to 40-50% before cuts begin, increase defensive stocks (healthcare, utilities, consumer staples), and hold cash to buy stocks at recession bottom.
. Should I refinance my mortgage before or after Fed cuts?
Wait until AFTER Fed cuts to refinance—rates will be 0.7-1.2% lower by June-September 2026. Don't refinance now at 7.0-7.2% when you can likely get 6.0-6.5% in 6-9 months. Refinancing costs $3,000-$5,000, so only refinance if rate drop is at least 0.75% (saves $150+/month on $300,000 mortgage = break-even in 20 months). Best refinance window: June-September 2026 after the aggressive 0.50% cut. Lock in rate 45-60 days before closing to protect against rate increases. If you're buying a home now, consider 7/1 ARM at 6.8% and refinance to 30-year fixed at 6.0-6.5% in 2026.
. How do Fed rate cuts affect bond prices?
Bond prices rise when Fed cuts rates because existing bonds paying higher yields become more valuable. Example: You buy 10-year Treasury at 4.5% today. After 1.25% Fed cuts, new 10-year Treasuries pay only 3.8%. Your 4.5% bond is now worth 5-8% more than face value. A $100,000 bond portfolio gains $5,000-$8,000 from rate cuts. Best strategy: Buy long-term Treasury bonds (10-30 year) NOW at 4.5-4.8% yields before Fed cuts in March 2026. Bond funds (BND, AGG) also gain 4-6% during cutting cycles. Shorter bonds (1-5 year) gain less (1-3%) but are safer.
. What are the Fed meeting dates for 2026?
The Federal Reserve holds 8 scheduled FOMC meetings in 2026: January 28-29, March 17-18, April 28-29, June 16-17, July 28-29, September 15-16, October 27-28, and December 15-16. Rate decisions are announced at 2:00 PM ET on the final day of each meeting, followed by Fed Chair press conference at 2:30 PM. Expected rate cuts at 4 of 8 meetings: March (0.25%), June (0.50%), September (0.25%), December (0.25%). Fed can call emergency meetings between scheduled dates if crisis occurs. Check FederalReserve.gov for official schedule and livestream links.
. Will Fed rate cuts cause inflation to rise again?
Unlikely in 2026 because Fed will only cut once inflation is under control (2-2.5% range, down from current 3.1%). Rate cuts during recessions don't cause inflation—they prevent deflation. Historical example: 2008 Fed cut 5.25% and inflation fell from 4.1% to 0.1% due to recession demand destruction. Risk scenario: If Fed cuts too aggressively (2%+ cuts) while inflation is still 3%+, it could reignite inflation in 2027-2028. Monitor core PCE inflation (Fed's preferred measure): If it stays above 2.5%, Fed will pause cuts. Best inflation hedge during cutting cycles: Gold, I-Bonds, TIPS bonds, real estate, commodities.
. How should I invest during Fed rate cutting cycles?
Best investments during Fed rate cuts: (1) Long-term Treasury bonds (10-30 year): Gain 5-8% as rates fall, lock in 4.5-4.8% yields today. (2) Gold: Gains 20-30% during recessions as safe-haven demand rises. (3) Defensive stocks: Healthcare (JNJ), utilities (NEE), consumer staples (PG) decline less than S&P 500. (4) I-Bonds: Guaranteed inflation protection at 5.27% yield. (5) REITs: Benefit from lower rates, yield 3-5%. Reduce: Growth stocks (tech), speculative crypto, high-yield bonds (default risk). Avoid: Leveraged ETFs (2x, 3x), individual bank stocks, small-cap stocks. Rebalance quarterly to maintain 30% bonds, 40% stocks, 15% gold, 10% cash, 5% REITs.
. Can the Fed prevent a recession by cutting rates?
Sometimes yes (soft landing), often no (recession still happens). Successful Fed cuts: 1995-1996 (prevented recession, stocks +20%), 2019 (insurance cuts, stocks +28.9%). Failed Fed cuts: 2001 (cut 5.5%, recession anyway, stocks -22%), 2008 (cut 5.25%, worst recession since 1930s, stocks -38%). Key difference: Soft landings occur when Fed cuts pre-emptively before recession starts. Recession cuts happen AFTER recession already began—too late to prevent. UBS's 93% recession probability suggests 2026 cuts will be the failed kind. Fed rate cuts take 6-12 months to impact economy (long lag time). If recession starts Q1 2026, March cuts won't prevent it. Best strategy: Assume recession happens despite cuts and position defensively.
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