Hey friends - hope you’re having a great week. Next week is the last real work week of the year. Don’t waste it by doing work.

🌎 The Big Picture

The biggest event of the week was the Fed.

It’s getting a little cheaper to borrow money, but your savings account will pay less.

The Federal Reserve cut baseline interest rates for the third time this year to support the economy as hiring slows. After aggressively hiking interest rates in 2022 and 2023 to fight inflation, policymakers began lowering borrowing costs last year when prices calmed down to avoid creating too much of a drag on business. The cost of living is still rising, but at a more manageable pace. So, this week, the Fed lowered its policy interest rate by another quarter percentage point, down to a range of 3.5% to 3.75%, to stimulate more borrowing, spending, and hiring without reigniting inflation. The Fed also started pumping a little more money into the system to keep everything running smoothly.

Short-term borrowing costs, like credit cards and small business loans, should get a little cheaper, and the interest rate on your savings accounts will decrease slightly.

But don’t expect a dramatic shift. Policymakers indicated that they aren’t planning to make many more interest rate cuts next year.

The Fed expects the economy to do pretty well in 2026, increasing its Gross Domestic Product (GDP) growth forecast, and inflation to stay under control. So, the Fed isn’t committed to changing much next year.

It’s not clear what will happen with long-term borrowing costs, like mortgage rates. Historically, they tend to follow the Fed’s actions, which would mean cheaper mortgage payments, but uncertainty about the US government’s ballooning debt has kept long-term borrowing costs high for everyone.

For now, it’s a smart time to review the interest rates on your debt for opportunities to lower your monthly payments and check on how much your savings account is paying you.

Student loan borrowers pay attention!

Millions of student loan borrowers will have to start making payments again as soon as next year. The Department of Education announced a proposed court settlement that would end the Saving on a Valuable Education (SAVE) plan, a program designed to help borrowers keep payments affordable based on a lower percentage of income and earlier thresholds for forgiveness. Due to ongoing lawsuits challenging the legality of the plan, borrowers haven’t had to make payments, though interest began accruing on August 1st.

The government’s settlement would end the SAVE plan, stop accepting new SAVE signups, deny open applications, and move over 7.6 million existing borrowers into other available repayment plans with higher monthly payments. Action could come as early as next year. If you’re on the SAVE plan, consider checking the Education Department’s Loan Simulator online tool to see which income-driven options work best for your budget and goals while things shake out in court.

Student loan defaults could soon reach record highs, and it might not be due to financial reasons. According to an analysis of borrower data by JPMorgan Institute, student loan delinquencies have climbed above pre-pandemic levels, and while financial strain remains real for some, most of the recent spike in missed student loan payments seems tied to confusion or administrative challenges rather than outright hardship. High-income borrowers are leading the trend, 45% more likely to be behind on payments than in 2019. Interestingly, overdue borrowers today would need to dedicate less of their spare income to loan payments and are less likely to be behind on other debts. Yet, more than three-fourths of these households have made no payments at all since the pandemic payment pause ended, suggesting many may be unaware of the payment restart or confused by changing rules.

Those borrowers still need to get their act together. If the Department of Education moves ahead with wage garnishment, the typical overdue borrower could lose half their discretionary spending money, and 8% may have to cut back on essentials like groceries.

If you’re not sure whether you need to make payments on your or your children’s student loans, now is the time to check.

🏭 The Companies Everyone’s Talking About

❔ The Big Question of the Week

Scoops app users: We have taken the beta app offline for a short period for some major updates. Can’t wait to show you all what we’ve been working on! Reach out if you have any questions.

We’re going to switch up the content in this spotlight for a bit to make sure you all have the info you need to master your week.