The FOMC (Federal Open Market Committee) is expected to cut interest rates on December 11, 2007 by 0.25%, effectively lowering the federal funds rate to 4.25%.

According to the futures markets, professional traders are currently 50% confident that rates will be cut by 25 basis points.

Last week, many economists were expecting a 0.50% drop, but because of a stellar report released last Friday indicating that America’s employment rate is healthy, experts are now confident that we will see only a 25 basis point cut.

What oes this mean for money market, savings, and CD (certificate of deposit) rates?

Unfortunately, we will continue to see banks cutting their yields all across the board. In the last few months, ever since the federal reserve bank first started cutting interest rates, we have seen an average decline of 0.37% in liquid money market & savings account rates and a decline of 0.31% in CD accounts.

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