Summary
Traders expect a rate cut in September, according to the CME FedWatch Tool. Money market fund yields will likely fall if the Fed starts cutting rates in September. It is a great time to "lock in rates" for a 9-month or one-year CD, experts say.
When building a bond portfolio, advisors consider duration, which measures a bond's sensitivity to interest rate changes. Money market fund investors can expect lower yields without price appreciation. While it is difficult to predict Fed policy, bonds could see "a healthy lift" if the Fed cuts interest rates by a full percentage point over the next year.
