08/15/2025: September Rate Cut? What It Could Mean for Your Portfolio
The Federal Reserve is set to meet in September, and markets are already placing near-certain odds on a rate cut. Futures markets are pricing in more than a 90% probability of a reduction in the federal funds rate. This expectation has been fueled by a combination of cooling inflation data, July’s consumer price index rose just 2.7% year-over-year, and signs of a softening labor market.
Yet despite market confidence, Fed officials remain publicly divided:
- The “wait-and-see” camp — Leaders like Atlanta Fed President Raphael Bostic and Kansas City Fed President Jeff Schmid point to resilient consumer spending and still-firm wage growth as reasons not to rush. They want more evidence inflation is sustainably moving toward the Fed’s 2% target before making their first cut in over four years.
- The “act now” camp — Other policymakers see the recent slowdown in hiring, moderating wage gains, and easing price pressures as a signal that the economy can handle, and may benefit from, lower rates sooner rather than later.
The next major clue will come from Fed Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium later this month. Historically, this event has been used to set the tone for upcoming policy shifts, and markets will be listening closely for confirmation or pushback against September cut expectations.
Why This Matters for Income Investors
The Fed’s actions directly influence short-term interest rates, and those changes tend to ripple through the fixed-income market quickly. When the Fed lowers rates:
- Yields on new CDs, bonds, and savings products drop. Banks and issuers often adjust rates even before the official cut, anticipating the move.
- High-yield, low-risk opportunities disappear quickly. Once rates fall, they rarely return to peak levels until the next tightening cycle, which could be years away.
- Investor demand for income assets rises. Lower yields make fixed income scarcer, increasing competition for quality deals.
We’ve seen this play out before: in prior cycles, yields on safe investments declined sharply in the months following the first Fed cut, often by more than a full percentage point within a year.
What It Means for Eppler Capital Investors
At Eppler Capital Funds, we believe this is a rare moment to secure elevated yields while they’re still available. Our Promissory Note Fund is designed to deliver fixed annual returns up to 9%, backed by secured lending. These returns are locked in by contract, meaning they will not fluctuate downward if the Fed lowers rates.
In other words:
- Predictable income regardless of where interest rates go next.
- Protection against yield erosion in a falling-rate environment.
- Attractive rates that may not be available later in the year if the rate-cut cycle accelerates.
For investors seeking stability and dependable cash flow, the window to act may be closing. The combination of market optimism about a September cut and the Fed’s eventual pivot toward easing could mean today’s higher yields are gone before autumn ends.
Closing Thought:
Economic cycles turn quickly. While the Fed debates timing, markets are already moving. By locking in your rate today, you can sidestep the uncertainty and preserve income strength through the coming rate-cut cycle.
Call to Action:
Contact us today to learn how you can participate in our Promissory Note Fund and secure dependable income at up to 9% per year, before the Fed makes its move.
Best,
Craig
