Time for the Fed to start cutting interest rates…what does that mean for investors, retirees, and Americans getting close to retirement?

The situation in the economy is not great right now, and the Fed is in a tough spot where they need to act.

ABC news reporting on September 11th: Applications for jobless benefits jump to 263,000 last week, most in nearly 4 years

In another grim sign for the U.S. labor market, jobless claim applications jumped to their highest level in almost four years last week, virtually assuring the Federal Reserve will cut its benchmark interest rate next week.

Fed officials recently have expressed greater concern about the deteriorating labor market than inflation, and while a rate cut could spur economic growth and boost the job market, economists fear it could push inflation even farther above the Fed's target of 2%.

The BLS's revised figures showed that U.S. employers added 911,000 fewer jobs than originally reported in the year ending in March 2025, with the biggest weakness coming from the leisure and hospitality sector, professional and business services and retail. The report showed that job gains were tapering long before President Donald Trump rolled out his far-reaching tariffs on U.S. trading partners in April.

The themes for much of 2025 have been that the economy is still growing, but slowly, the labor market is clearly deteriorating, and that appears to be accelerating, inflation has come down to a more manageable 3%, but it remains sticky.

So what is the Fed to do? It appears this week as I record this Podcast episode that it is pretty much guaranteed that the Fed is going to cut rates by a quarter of a percent or 25 basis points.

The problem with the timing of this is that the expected inflation from tariffs has not been canceled but just delayed. I talked about that a couple months ago when I did the mid year market and economic update, and it appears that the expected inflation from tariffs has not yet fully entered the economy. Which means that if the Fed were to lower interest rates they're walking on a tightrope – A stagflation like risk which would be horrible to put it mildly is not off the table.

So this week on the podcast I'm going to talk about the expected rate cut which by the time you listen to this podcast will likely have already happened. I'll talk about some of the possible scenarios that come along with a cut in interest rates, and most importantly I'll talk about what that means for investors and savers and retirees. What does that mean for your investment portfolio what does that mean for stocks and bonds. What does that mean for housing and mortgage rates.

I'll talk about all of that in this week's episode…