Most savings coverage is still written around the assumption that rate cuts are coming. That assumption deserves a serious re-examination.
For the past two years, the dominant narrative in personal finance has been some version of the same sentence: lock in a CD now before rates fall further. The implied logic was that Fed cuts were coming steadily, CD rates would keep sliding, and the window to earn above 4% would not last long.
That story may be changing in a meaningful way. And nobody on a CD calculator site has said it plainly yet.
J.P. Morgan Global Research, one of the most closely watched forecasters on Wall Street, is now projecting that the Federal Reserve will hold rates steady for the entire remainder of 2026, with the next move being a 25 basis point rate hike in the third quarter of 2027. Not a cut. A hike. If that forecast is even approximately right, the CD rate picture looks very different from what most savings coverage has been telling people.
What the March FOMC Meeting Actually Said
The Federal Reserve held its benchmark rate at 3.50% to 3.75% at the March 17-18 meeting, with an 11 to 1 vote to keep policy unchanged for the second consecutive meeting. That part was widely reported.
What got less attention was the language inside the minutes. Fed participants noted that inflation progress had essentially stalled. Core PCE, the Fed’s preferred inflation measure, is sitting at 2.7%, still well above the 2% target. Some participants flagged that recent progress on reducing inflation had been absent in recent months. A couple of them pushed their expected timing of any rate cuts further into the future compared to their previous forecasts.
The dot plot, which shows where FOMC members expect rates to be at the end of each year, still signals just one 25 basis point cut for 2026. But the broader message from the March meeting was that the bar for that cut has risen. Inflation needs to cooperate, the labor market needs to weaken more noticeably, and the geopolitical picture needs to stabilize. None of those conditions are cleanly in place right now.
| What the Fed actually said: “Some participants remarked that further progress in reducing inflation had been absent in recent months.” That is not the language of a committee preparing to cut rates in the near term. |
The Iran Conflict and Energy Prices: A Factor Nobody Is Talking About for CDs
There is a second force complicating the rate picture that savings coverage has almost entirely ignored in the context of CDs: the conflict in the Middle East and its effect on energy prices.
The March FOMC minutes specifically noted that the conflict in Iran caused sharp increases in energy prices and raised questions about the macroeconomic outlook during the intermeeting period. Higher energy prices feed directly into inflation. When energy costs rise, transportation costs rise, food costs rise, and the general price level becomes harder to push back toward 2%.
J.P. Morgan’s economists noted that the conflict has generated significant impacts far beyond energy markets, creating headwinds for sectors from agriculture to aviation. Their conclusion was that the late April FOMC meeting looks like an easy call to stay on hold, and they expect that holding pattern to continue through 2026.
For CD savers, this matters because it changes the calculus around waiting. If you have been holding off on opening a CD because you thought rates might rise slightly before you committed, or simply because you expected the rate environment to stay stable indefinitely, the Iran factor is worth understanding. Energy-driven inflation is harder for the Fed to address with rate policy because it originates from supply disruptions, not excess demand. That creates a scenario where inflation stays elevated, the Fed stays cautious, and the rate environment stays exactly where it is for longer than most people expect.
The April 28-29 Meeting: What to Expect and What It Means
The next FOMC meeting is April 28 to 29, 2026, which is three days from the date of this article. Markets are pricing in only a 14% chance of a rate cut at this meeting, according to CME FedWatch data. The overwhelming consensus is another hold.
The question that matters more for CD savers is not what happens on April 29, but what the Fed signals about June. The June 16-17 meeting is the next scheduled meeting that includes a Summary of Economic Projections and dot plot update, which provides the clearest forward guidance on the rate path. If the April statement and press conference are notably cautious, or if Powell signals the bar for a June cut remains high, that would be meaningful information for anyone sitting on the fence about opening a CD.
| The key question going into April 29: Does the Fed’s statement acknowledge any path toward a June cut, or does it reinforce the holding pattern through the summer? The answer will be visible in the press conference language within hours of the 2:00 PM announcement. |
What a Full-Year Hold Means in Dollar Terms for CD Savers
Let’s put concrete numbers on this. Here is what a $20,000 deposit earns at current competitive rates across different scenarios, compared against what happens if rates drop as originally forecast versus if they stay flat through year end.
| Scenario | $20,000 Deposit | Term | APY | Total Interest |
| Open today, rates hold | $20,000 | 12 months | 4.50% | $903 |
| Open today, rates hold | $20,000 | 2 years | 4.20% | $1,718 |
| Wait 6 months, one cut | $20,000 | 12 months | 4.00% | $802 |
| Wait 6 months, one cut | $20,000 | 2 years | 3.75% | $1,531 |
| Cost of waiting 6 months | $101 to $187 less |
The difference between opening now versus waiting six months through one potential rate cut is roughly $100 to $190 on a $20,000 deposit over 1 to 2 years. That assumes only one cut. If the hold extends further and no cuts happen in 2026 at all, as J.P. Morgan now forecasts, the urgency of acting now becomes less about beating a falling rate and more about simply choosing when to start earning.
What changes in a no-cut scenario is that the premium on urgency disappears. You are not racing a rate cut. You are just deciding when you want your money to start compounding at a guaranteed rate instead of sitting in a lower-yield savings account.
Why This Changes the CD Decision Entirely
The standard advice for the past 18 months has been: open a CD now before rates fall. That advice was based on a rate environment where cuts were coming fast and the window was shrinking.
If J.P. Morgan’s forecast is even directionally right, the decision framework shifts. Here is how:
If the Fed holds through 2026
Competitive CD rates stay roughly where they are. The best 12-month CDs are currently paying up to 4.50% APY, and the best 2-year CDs are around 4.20%. Those rates do not collapse overnight. They erode slowly as banks adjust to the broader environment. Opening a CD now versus in two months probably does not make a dramatic difference, but opening one now versus not opening one at all costs you meaningful interest income on an annual basis.
If the Fed hikes in 2027
This is the genuinely unusual scenario that almost no savings coverage is discussing. J.P. Morgan forecasts a 25 basis point hike in Q3 2027. If that happens, CD rates would likely rise in that environment. Someone who locks into a 3-year or 5-year CD at today’s rates could find themselves below market rates by 2027 if hikes materialize.
This is a genuine trade-off, and one that is specific to the current unusual forecast. For most of the past two years, the risk of locking in was that rates would stay high and you missed out on nothing. The risk of a rate hike in 2027 is something different entirely and argues for shorter-term CDs right now: 6-month, 9-month, or 12-month terms that mature before any potential tightening cycle.
If the Fed cuts in June or later in 2026
This remains the median outcome, with the dot plot still showing one cut for 2026. In this case the original advice holds: today’s rates are better than what is likely coming, and locking in now makes sense. The question is the size of that cut and how quickly banks pass it through to CD rates. Historically there is a lag of 30 to 60 days between a Fed cut and meaningful changes in CD rates at competitive online banks.
| The practical conclusion: The safest term in any of these three scenarios is 12 months or less. You capture a strong rate today, stay flexible enough to reassess when the rate path becomes clearer, and avoid the risk of being locked into a below-market rate if any hikes materialize in 2027. |
What Rates Look Like Right Now Across Major Term Lengths
As of April 25, 2026, here are the best available APYs from online banks and credit unions versus the FDIC national average:
| Term | Best Available APY | FDIC National Average | Where the Best Rates Are |
| 6 months | 4.33% | 1.47% | Online banks and credit unions |
| 9 months | 4.20% | N/A | Newtek Bank |
| 12 months | 4.50% | 1.52% | Online banks and credit unions |
| 2 years | 4.20% | 1.49% | Online banks and credit unions |
| 3 years | 4.15% | 1.44% | Online banks and credit unions |
| 5 years | 4.15% | 1.34% | Online banks and credit unions |
The inverted yield curve that was discussed in earlier months is still present but less pronounced than it was. Shorter terms still offer competitive rates relative to longer ones. The case for staying short, given J.P. Morgan’s hike forecast for 2027, is stronger now than it was three months ago.
Use the calculator at highyieldcdcalculator.com to run your own deposit through these scenarios. Enter the same amount at 4.50% for 12 months, then at 4.20% for 2 years, and compare the results. The tool shows both final maturity value and total interest so you can see the concrete dollar difference before committing.
The Bottom Line
The conventional savings advice of 2024 and early 2025 was built around one assumption: rates are falling, lock in now. That assumption is being tested by data that simply does not cooperate. Inflation is stuck above 2%. The Iran conflict is putting upward pressure on energy prices. J.P. Morgan is forecasting no cuts for the rest of 2026. And a minority but credible voice on Wall Street is now talking about hikes in 2027.
None of this means CDs are a bad idea. Quite the opposite. In an environment where the direction of rates is genuinely uncertain, a CD is one of the few financial products that removes that uncertainty entirely. Whatever the Fed does next month, next quarter, or next year, a CD opened today pays exactly what it promises for exactly the term you choose.
The question is not whether to open one. It is which term makes sense given a rate path that is far less certain than it appeared six months ago. The answer, given the J.P. Morgan forecast and the energy-driven inflation picture, leans toward shorter terms. Capture a strong rate now, stay nimble, and reassess when the picture clears.
| See what today’s rates mean for your deposit. Calculate now: highyieldcdcalculator.com |