Everything you need to know about interest rates

All day yesterday, I had Sheryl Crow’s version of “The First Cut Is The Deepest” as an earworm, ahead of the U.S. Federal Reserve’s important meeting.?

And I was right. The Fed slashed the Federal Funds target interest rate by 50 basis points, lowering borrowing costs for the first time in more than four years (!) and hopefully steering the economy on a path for a soft landing.

That is great news for consumers, who will see relief in all corners of borrowing. Echoing the Fed's move, banks including JPMorgan Chase, Bank of America and Wells Fargo immediately reduced their prime rates. (The prime rate influences mortgages, small business loans, credit cards and personal loans.)

On the flip side, the Fed’s move means that certificates of deposit, money market accounts and other places to park cash will deliver lower yields.?

Shifting to longer-term investments, bonds have been a good bet for investors at the start of the Fed's rate-cutting cycles. But this time around Treasuries already experienced a huge rally, and some investors believe they're unlikely to run much further unless the economy enters a recession.

And stocks? That one is a little more complicated. Today there is a global rally. But tomorrow the dust could settle and stocks could be stagnant.

Follow our Markets coverage here for the latest news!

How to retire

If you find it hard to plan for retirement, here is a little secret: It is hard for everyone – even the world’s foremost experts on the topic.

Take Christine Benz, for example. As the longtime director of personal finance and retirement planning for investment research firm Morningstar, Benz knows pretty much everything there is to know on the subject.

But when her own father started experiencing cognitive decline, she assumed financial responsibilities for her parents – and was swarmed with hundreds of retirement-related challenges one cannot fully understand until experienced.

So Benz wrote a book about it. And Chris Taylor interviewed her, where she shares these five main pointers on how to retire.

How to invest in the life you want (and deserve)

I'm here to share a few key takeaways from a Savvy Ladies event I moderated on Tuesday called "Investing in the Life You Want." The panel featured Mara Cristina Tache of Mastercard, Francesca Vitale of Bank of America, Liza Streiff of Knopman Marks Financial Training, and Kira Forbes-Belgrave of J.P. Morgan.

Their tips:

? Time is your most valuable asset. It gives you the ability to think, prioritize what is important and thrive.

?? Take your vacation! (No one will write on your tombstone that you worked 80 hours per week in September 2024.)

?? Invest in your professional and personal network. It will reward you for a lifetime.

?? Do not burn bridges. You never know when your path will cross again with former colleagues and clients.

?? Money does not buy happiness. But it gives you flexibility and security. So, live beneath your means: Save for an emergency, but also save for the occasional splurge!

?? Know your worth. While it might feel weird, compare salaries with colleagues and competitors. When you ask for a raise, be prepared to deliver three key examples of outperformance. Factor in the value of benefits, including paid time off, when negotiating compensation.

Three ways to manage surging pet care costs

I often say to anyone who will listen that I love my dog the most. (Apologies, kids! Sorry, hubby!)?

And I know plenty of people who feel the same way.?

But, like children, pets are expensive. All told, Americans spent $147 billion on their pets in 2023, according to the “State of the Industry” report by the American Pet Products Association.

Despite the cost, we will do anything for Fluffy and Fido. My friends are shelling out thousands of dollars for pet cancer treatments. Ditto for dental care or pricey surgeries.??

Thanks to the surging cost of pet care, 91% of pet owners report experiencing financial stress, according to a recent survey of dog owners by USA Today.

Here are three ways to stay sane and keep your pet finances healthy.

What is the most expensive healthcare decision you have made for a pet? Let me know about the experience and how you handled it financially!?

Write to me at [email protected]. Be sure to include your name and where you live.

Reuters poll ??

I’ve received a ton of reader mail about freezing your credit, so thank you for sharing your thoughts. (I read every email!) In our last poll, 51% of respondents say you have not frozen your credit, while 30% have (and another 19% are considering it!) Fascinating stuff.

Now, for this week’s poll: Where will the Fed’s interest rate cut impact you the most? Take our poll here. Be sure to share your thoughts in the comments or email me at [email protected].

A$K LAUREN

Do you need to take out a student loan? Are you planning to retire in the next year? Send your money questions to [email protected], and I'll tap my extensive source network and braintrust for expert advice.

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