President Trump Demanded That Interest Rates Drop 'immediately.' A Cd Can Lock In High Rates While They Last

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• At the World Economic Forum, President Donald Trump said, "I'll demand that interest rates drop immediately."
• Opening a CD can ensure you lock in strong interest rates in case of rate drops.
• Online banks and credit unions with strong CDs are offering rates between 4.50% and 5.00% APY.

On January 23, President Donald Trump appeared at the World Economic Forum in Switzerland to give a speech. During his speech, which also covered topics such as tariffs and inflation, Trump said that he would "demand that interest rates drop immediately."

If interest rate drops are on the horizon, certificates of deposit are a great way to lock in a good rate before rates lower. The best CD rates are between 4.50% and 5.00% APY, and once you open a CD, you'll be locked into that rate for the duration of its term length.

Should you prepare for lower CD rates?

The Federal Reserve, which is the central banking system of the U.S., can greatly impact interest rates by raising or lowering the federal funds rate when the next Federal Reserve meeting takes place. As President, Trump cannot require the Federal Reserve to raise or lower its rates since the Fed acts independently.

"Part of the independence of the Federal Reserve from the presidential branch is that the Federal Reserve is the one who ultimately makes these decisions. We've never seen a president be able to unilaterally sway what the Federal Reserve has done," says Christopher Stroup, CFP® professional, founder and financial advisor of Silicon Beach Financial.

The Federal Reserve's decisions on whether to raise or lower rates depend on the strength of the economy. "Price stability and full employment is the dual mandate of the Federal Reserve," says Stuart Schiffman, CFP® professional, managing partner of Compound Wealth Advisors.

The Federal Reserve lowered rates in December of 2024 after lowering interest rates in September and October before that. But it might not continue that trend in the new year; the CME Fedwatch tool predicts an over 90% chance that the federal funds rate will stay the same at the January 28 to 29 Federal Reserve meeting.

"The Federal Reserve indicated that they were going to slow the drop-down in interest rates so that they could gather more information around what was happening with inflation and also what's going on in the economy," says Stroup. "Interest rate drops may be possible through the Federal Reserve, but they've indicated that the volume of rate drops is likely to be smaller than what people, maybe, previously expected," Stroup adds.

Schiffman says that some of the measures Trump has talked about, such as tariffs, could lead to interest rate increases from the Fed due to their effects on inflation.

How to lock in an interest rate with CDs

If you want to prepare for potential future interest rate drops, CDs are a good method to do so. CDs offer a fixed interest rate, which means that your interest rate will not change from the time you open your CD to the time its term length ends. For example, if you open a 1-year CD with 4.50% APY, that CD will keep its 4.50% APY until a year has passed. In exchange, you can't withdraw your money without penalty until the end of the term length, either.

You can generally find CDs offering term lengths from three months to five years. Right now, when comparing short-term CD rates vs. long-term CD rates, short-term CDs give higher rates because banks still expect CD rates to drop, and they don't want to be locked into an overly high rate for years.

You should ultimately base your decision on what length of CD to open on your own personal savings goals. "I think it's really important for consumers to understand, what is the goal for that money? What is the time horizon associated with it? And then pick the CD product that aligns best with those circumstances," says Stroup.

Choosing the right CD for you

To help you choose a CD for your purposes, we've created a list of some of the best nationwide CDs currently offered. These are primarily held by online banks or credit unions, which tend to offer better rates than traditional banks. We've included a variety of term lengths to choose from so you can find a CD that best fits your needs.

Other ways to prepare for lower interest rates

If you aren't interested in a CD, there are other ways to earn a good interest rate through investing.

"You can invest in many things other than bank CDs. There's plenty of other fixed-income instruments that you can elect to purchase," says Schiffman. Options he lists include I bonds, which is a type of savings bond offered by the U.S. Treasury directly, and money market funds, a type of bond fund with short maturities.

Putting your money into something short-term like a money market fund could keep you from being locked into a lower rate for a significant period of time if interest rates rise, says Schiffman. "You don't have to make the bet as to whether rates are going to go up or down."

Don't know where to start? Consider a financial advisor. 

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