How you may be affected by the Fed's rate-cut

The Fed hopes its cut will spur more spending, not saving, but it could hurt investors trying to earn interest.

Savers and investors with money parked in bank certificates of deposit, money market accounts and money market mutual funds could get pinched upon renewal as rates on those investments fall.

Investors with CDs maturing soon will have to choose between reinvesting in CDs with lower rates or another investment.

"Investors who have stayed in CDs took those teaser rates from banks are now going to be in a predicament," said Roberta Tucker, director of fixed income for Compass Bank Wealth Management Group.

Where is my escape hatch? About the only option available to me in my retirement account that seems somewhat safe is a money market mutual fund. We have Dez lined up with a money market account and bonds. Suggestions?

More reading: Why the Fed's rate cut won't work, by bonddad:

Total household debt outstanding went from about $8 trillion to a little under $14 trillion, or an increase of about 75%.

All of that debt has to go somewhere -- it doesn't exist in a financial netherworld. It has to become an asset to somebody. And it has -- in the form of a massive amount of securitizations which are currently being written down by literally every financial name in the business. So far we've seen about $100 billion or writedowns in the financial markets and we are going to see more. That's the central problem right now; it's not interest rates but the amount of crap on the books of various financial players (hell -- all the financial players).

In other words, the problem isn't the need too underwrite more consumer debt -- we are already choking on consumer debt. The problem is the system made too many loans that are now going bad. And the only way to wean us off of that problem (easy money) is to feel the pain so we don't do it again.