U.S. — Three Federal Reserve officials voted to raise interest rates at the July 2026 meeting. This dissent marked the first instance since September 2016 that three Federal Reserve policymakers dissented with a unified preference for raising rates.

The Federal Reserve kept interest rates unchanged in its first five meetings of 2026 following three rate cuts in the final four months of 2025. The CME Group's FedWatch tool indicated a roughly 60% to 70% probability of a Federal Reserve interest rate hike at its September 2026 meeting as of early August 2026.

The three dissenting Fed officials—Beth M. Hammack, Neel Kashkari, and Lorie K. Logan—had previously advocated for rate hikes to combat inflation. Kashkari and Hammack explicitly stated in June 2026 that current policy was insufficient to curb inflation above the 2% target. Kevin Warsh serves as the Federal Reserve chair as of spring 2026.

"We entered 2026 with the market expecting multiple rate cuts," says Derik Farrar, senior vice president and head of everyday banking and borrowing at U.S. Bank. "We've had no cuts, and now the next move is likely up." Farrar added that attractive rate and term certificate of deposit combinations continue to come to market given robust loan demand. "With a rate cut off the table, and robust demands for loans, attractive rate and term CD combinations continue to come to market," Farrar says. "If you wait a few months and no desirable long-term CD options emerge, today's CD offers will likely still be available given the market consensus that the next move is up."

Certificate of deposit interest rates available in August 2026 included 3.95% for a 3-month term, 4.15% for a 6-month term, 4.10% for a 9-month term, 4.40% for a 1-year term, 4.35% for an 18-month term, 4.30% for a 2-year term, and 4.50% for a 3-year term. Marcus by Goldman Sachs offered a 4.10% annual percentage yield on its 9-month certificate of deposit as of August 1 and August 3, 2026.

High-yield savings accounts and money market accounts offered average variable interest rates of approximately 4% in August 2026. The Federal Deposit Insurance Corporation reported an average traditional savings account interest rate of 0.38% as of August 2026. The national average interest rate for a 1-year certificate of deposit was 1.65% as of August 2026, according to Federal Deposit Insurance Corporation data.

"Right now I'd point most savers toward a CD, not a money market account," says Jeff Judge, a managing partner and certified financial planner at Chesapeake Financial Planners. "Rates like this don't sit around forever, and locking today protects against the scenario where they move against you before you act," Judge says. "The most common mistake I'm seeing is savers leaving six figures in a checking account earning close to nothing while they 'wait to see what the Fed does.'"

Christopher Stroup, a certified financial planner and founder of Silicon Beach Financial, offered a different perspective on preserving liquidity. "I'd lean toward a money market account for most savers right now," Stroup said. "With policy uncertainty still high, preserving flexibility has real value. Many clients are keeping cash accessible while earning competitive yields rather than locking into a CD before there's more clarity on where rates ultimately settle."

Why It Matters

The shift from expected rate cuts to a likely hike alters the financial landscape for savers, creating a divergence between traditional bank accounts earning roughly 0.38% and high-yield options offering around 4%. This policy uncertainty forces individuals to choose between locking in current certificate of deposit rates to secure returns or maintaining liquidity in money market accounts while awaiting clearer direction on interest rates.