CD Rates After Fed Rate Cuts: The 1990-2026 Record (Updated 2026)
Written & reviewed by Hans Goldstein, EA, independent licensed insurance producer · CA license 4273294 · NPN 20602398Admitted to practice before the IRS
Fed target history checked on federalreserve.gov and Treasury yields on treasury.gov, September 24, 2026 · Updated
Short-term CD rates follow the Fed; long-term CD rates follow the 5-year Treasury, which often does not. In the 2001 and 2007 cycles the 5-year Treasury fell hard as the Fed cut, but in the 2024-2025 cycle it rose, from 3.47% the day before the first cut to 3.72% on the day of the last. Now the Fed has reversed: it raised its target to 3.75% to 4.00% on September 16, 2026, the 5-year Treasury was 5.03% on September 24, and the best 5-year CDs paid about 4.35% to 4.50%.
Where rates are now (September 2026)
| Measure | Level | As of |
|---|---|---|
| Federal funds target range | 3.75%-4.00% (raised 0.25%) | 09/17/2026 |
| Next FOMC meetings | October 27-28 and December 8-9, 2026 | calendar |
| 1-year / 5-year Treasury | 4.51% / 5.03% | 09/24/2026 |
| Best nationally available 1-year CDs | 4.35%-4.50% APY | 09/25/2026 |
| Best nationally available 5-year CDs | 4.35%-4.50% APY | 09/25/2026 |
| A-rated-or-better 5-year MYGAs | ~5.50%-6.05% | 10/14/2026 |
Every cutting cycle since 1990
| Cutting cycle | Fed target, before → after | 1-yr Treasury, day before first cut → last cut | 5-yr Treasury, day before first cut → last cut | 5-yr Treasury 1 year after last cut |
|---|---|---|---|---|
| 1990-1992 | 8.25% → 3.00% | 7.98% → 3.18% | 8.37% → 5.30% | 4.60% (09/07/1993) |
| 2001-2003 | 6.50% → 1.00% | 5.32% → 1.05% | 4.99% → 2.32% | 3.85% (06/25/2004) |
| 2007-2008 | 5.25% → 0%-0.25% | 4.23% → 0.45% | 4.21% → 1.34% | 2.35% (12/16/2009) |
| 2019-2020 | 2.25%-2.50% → 0%-0.25% | 2.00% → 0.29% | 1.84% → 0.49% | 0.83% (03/16/2021) |
| 2024-2025 | 5.25%-5.50% → 3.50%-3.75% | 3.95% → 3.56% | 3.47% → 3.72% | n/a |
Why Treasuries and not CD rates? Banks price CDs off Treasury yields of the same term, and a consistent public history of the best CD rates does not exist for the older cycles. An earlier version of this page showed "top 5-year CD" figures for each cycle that could not be traced to a source; they have been removed.
2019-2020, cut by cut
| Date | Fed target | 1-yr Treasury | 5-yr Treasury |
|---|---|---|---|
| 07/31/2019 (before first cut) | 2.25%-2.50% | 2.00% | 1.84% |
| 08/01/2019 | 2.00%-2.25% | 1.88% | 1.68% |
| 09/19/2019 | 1.75%-2.00% | 1.88% | 1.66% |
| 10/31/2019 | 1.50%-1.75% | 1.53% | 1.51% |
| 03/04/2020 | 1.00%-1.25% | 0.59% | 0.75% |
| 03/16/2020 | 0%-0.25% | 0.29% | 0.49% |
2024-2026: cuts, then a hike
| Date | Fed target | 1-yr Treasury | 5-yr Treasury |
|---|---|---|---|
| 09/18/2024 (before first cut) | 5.25%-5.50% | 3.95% | 3.47% |
| 09/19/2024 | 4.75%-5.00% | 3.93% | 3.49% |
| 11/08/2024 | 4.50%-4.75% | 4.32% | 4.20% |
| 12/19/2024 | 4.25%-4.50% | 4.28% | 4.43% |
| 09/18/2025 | 4.00%-4.25% | 3.61% | 3.67% |
| 10/30/2025 | 3.75%-4.00% | 3.70% | 3.72% |
| 12/11/2025 | 3.50%-3.75% | 3.56% | 3.72% |
| 09/17/2026 (hike) | 3.75%-4.00% | 4.40% | 4.78% |
| 09/24/2026 | 3.75%-4.00% | 4.51% | 5.03% |
What the record shows
- The short end follows the Fed. The 1-year Treasury, and with it 1-year CD rates, tracked every cycle down.
- The long end has a mind of its own. The 5-year Treasury fell sharply in recession-driven cycles (2001, 2007-2008, 2020) and rose during the 2024-2025 cuts.
- Lows can last. A year after the 2008 and 2020 cycles ended, the 5-year Treasury was still near its lows (2.35% in December 2009, 0.83% in March 2021).
- Cycles end. The Fed cut 1.75% from September 2024 to December 2025, then raised rates in September 2026.
Related: Lock a CD now or wait? · MYGA rates after Fed cuts
Top 5-year CD vs. a 5-year MYGA: $250,000 math
| $250,000 for 5 years | Top 5-year CD at 4.50% | 5-yr MYGA at 5.50% |
|---|---|---|
| Rate | 4.50% APY, fixed | 5.50%, fixed for the term |
| Tax on earnings | Every year | Deferred until withdrawn |
| Value after 5 years, after 24% federal tax | ~$295,800 | ~$308,300 (tax paid at the end) |
| Protection | FDIC, $250K per ownership category | Insurer claims-paying ability + state guaranty association (limits vary by state) |
| Getting out early | Interest penalty | Surrender charge above the free-withdrawal amount; IRS 10% penalty before 59½ |
About $12,500 more after federal tax on the MYGA (24% bracket, state tax ignored). For money you may need inside two years, or that must stay FDIC insured, the MYGA is the wrong tool. MYGA benchmark: carriers rated A or better topped out around 5.50% to 6.05% on 5-year compound-interest MYGAs, per public carrier rate sheets, October 14, 2026. Rates vary by state, premium and carrier.
CD rates and the Fed: FAQ
Do CD rates always drop after a Fed cut?
Short-term CD rates usually follow the Fed because banks price them against short Treasury yields, which move with the Fed's target. Long-term CD rates follow the 5-year Treasury, which does not always fall: in the 2024-2025 cutting cycle the 5-year Treasury yield was 3.47% the day before the first cut and 3.72% on the day of the last one.
What is the Fed funds rate now?
3.75%-4.00%. The FOMC raised the target range by 0.25% on September 16, 2026 (effective September 17), after holding at 3.50%-3.75% since December 2025. The next scheduled meetings are October 27-28 and December 8-9, 2026.
What are CD rates right now?
The best nationally available 1-year and 5-year CDs paid about 4.35%-4.50% APY (DepositAccounts, updated 09/25/2026). The 1-year Treasury yielded 4.51% and the 5-year 5.03% on September 24, 2026.
How far did rates fall in the 2019-2020 cycle?
The Fed cut from 2.25%-2.50% to 0%-0.25% between August 2019 and March 2020. The 5-year Treasury went from 1.84% the day before the first cut to 0.49% on March 16, 2020, and was 0.83% a year later.
How far did rates fall in 2007-2008?
The Fed cut from 5.25% to 0%-0.25% between September 2007 and December 2008. The 5-year Treasury went from 4.21% to 1.34%, and was 2.35% a year after the last cut.
Should I lock a CD or MYGA now?
Nobody knows the next move; the Fed just raised rates. What is known is today's menu: the best 5-year CDs about 4.35%-4.50%, the 5-year Treasury 5.03%, and A-rated-or-better 5-year MYGAs about 5.50%-6.05% (October 14, 2026). Locking a term removes reinvestment risk whichever way rates go.
My take
History says short-term CD rates move with the Fed and long-term rates follow the 5-year Treasury, which can go either way. With the Fed now raising rates and the 5-year Treasury above 5%, the useful question is not when to lock but what the best fixed rate is today for the term you need.
Hans Goldstein is an independent licensed insurance producer (CA license 4273294, NPN 20602398). Historical figures are from the Federal Reserve and the U.S. Treasury as cited; past rates do not predict future rates. MYGA figures are illustrations, not quotes.
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Disclosure
Fed funds rates, Treasury yields and product rates cited in this article are dated where they appear; the page was last checked September 24, 2026. CD, MYGA, and HYSA rates change frequently: typically weekly for HYSAs, daily-to-weekly for CDs, and monthly for MYGAs. Always confirm current rates against the carrier's most recent disclosure and the actual contract before purchasing. This is general education, not a personal recommendation or an offer of any product. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers. CDs are FDIC-insured to applicable limits; MYGAs are backed by the issuing carrier and state guaranty associations (typical coverage $250,000-$300,000 per owner per carrier); HYSAs are FDIC-insured to $250,000 per depositor per institution. MYGAs are long-term contracts with surrender charges; they are not suitable for funds you may need before the end of the surrender period. Past rate trends do not predict future rates. AM Best ratings and tax treatment are subject to change.