Jump on This Passive Income Opportunity Before the Fed Ruins It

Generate Steady and Predictable Income Right Now…

Late-summer, 1981.

My grandmother and I were just coming back from K&B, a long-defunct drugstore, where she’d bought my notebooks and pencils and such just before another school year was about to begin. On the way home, we pulled into the parking lot of this particular 1970s-style building. At the time, it was home to a long-defunct bank where my granny had held her accounts for decades: Louisiana National Bank, known then simply as LNB.

Inside, I sat impatiently as she signed the documents for a $10,000, 10-year certificate of deposit. That was a ton of money for her and my grandfather. They were lower middle class—a car mechanic/tire salesman, and a chemical company purchasing agent. I remember the banker telling her she was making a great decision, locking in her money for such a long period of time.

Many years later, after she died, I was cleaning out her metal filing cabinet—she kept everything she’d ever signed—and I found the carbon-paper copy of that document.

Her interest rate on that CD: 15.5%.

She’d locked in a huge interest rate just before the Federal Reserve began cutting rates after its historic—and ultimately successful—fight against inflation in the late-`70s.

I share this story because we are approaching another interest-rate inflection point.

The Fed, as you well know, has been locked for 15 months now in its Next Great War Against Inflation.

That war has seen the Fed jack up interest rates at the fastest pace since the 1970s. Rates that were effectively zero as recently as March 2022 are now near 5.5%.

As a result, CD rates that were effectively 0% in March 2022—and have been effectively 0% for years—are now running as much as 5.6% for a one-year term, and as much as 4.6% for a five- or six-year term.

To me, this is a Grandma Moment—a chance to lock in higher CD rates before the Fed inevitably begins backtracking by cutting interest rates once more.

See, rate cuts are inevitable.

I’ve talked about this many times, but America today is not the America of the late-‘70s. Back then, America had no meaningful debt at the governmental, corporate, or household level. Today’s America is a financial disaster—a heavily indebted beggar—awaiting the wrong spark.

That spark is the Federal Reserve.

The cost of servicing debt has rocketed higher for Uncle Sam, consumers, and the excessive amount of zombie corporations that have relied on debt to stay alive over the last two decades. Today, all three face increasingly painful debt-servicing payments that are robbing the economy of productive cash.

Though the Fed’s mandate has nothing to do with worrying about national debt levels, the reality is that the Fed has much to worry about because high interest rates could literally crush Main Street and Corporate America—and could well lead to a malevolent debt spiral for Uncle Sam’s debt.

So, interest rate rates will be coming down … at some point.

Until they do, CD rates are going to remain elevated and likely rise as the Fed throws its last few grenades at an inflation problem it cannot successfully destroy this time around.

Today’s CD rates are plump enough to generate a decent bit of safe income. You certainly don’t have to worry about your CD collapsing in value.

Right now, you can lock in a 5.5% return on a six-month CD. At that rate, a $25,000 deposit is nearly $115 a month, or $1,375 a year.

The reason I’m focused on a six-month CD is because I want flexibility at the moment. I don’t want to lock in longer-term, five-year CDs just yet because they’re all still under 5%. (That’s true for the rates I’ve found on a national level. If you have a local bank offering five-year rates north of 5%, then I would tell you to lock in now.)

The most recent inflation data showed that consumer prices have started to rise again at a faster pace, which prompted the Fed to quickly state that it sees higher rates for a longer period of time. Translation: “Yo, yo, my American peeps: We’ll be raising rates a few more times.”

What I want to do at this moment is earn a nice income—5.5%—while awaiting those further rate hikes.

As those hikes materialize, we’re going to see CD rates bump up even more. That, in turn, will push rates on five-year CDs above 5% across the country. That’s when I would want to lock in those longer-term rates.

When the Fed stops hiking rates and starts cutting instead, you’ll be sitting pretty—just like my Granny did.

By the mid-`80s, the Fed had cut rates to less than 6%. Long-term CD rates were in the 5% range… and there was my grandmother… still collecting a 15.5% return on her cash… safely socked away for the remainder of the decade.

That’s the opportunity we have today.

I’ll discuss eight opportunities like this on September 7 during my free online event: The Passive Income Workshop.

During this workshop, I’ll shed light on how you can generate passive income immediately and maintain your current quality of life (or better) for as long as you want—without depleting your nest egg.

I’m talking about a way to grow your savings by as much as 470x the monthly returns you’re getting at your bank…

Click here to claim your free spot now.

You’ll never get a 15.5% return on a CD, but soon enough you will be able to secure a five-year rate that will exceed 5%. And that will make you feel very smart when CD rates are much, much lower later this decade.