I currently have my most liquid cash in a MMF with Fidelity earning ~4.1% with instant access. I expect this rate to go up as the FFR rate goes up so this could end up in the 4.5-5% range in upcoming months. What I like about the MM fund is that its super easy, no lockup, same day access, and rates for practical purposes = to CD's and treasury bonds(given that rate will likely go up in the very near future) However, I also realize that this is far from a guaranteed long term rate for my savings, and that it will likely come down significantly when the Fed lowers rates at some point in the future i.e. maybe a year from now, guessing. In other words, unlikely to remain >4% long term.
I'm wondering if it might be wiser to move this highly liquid part of my EF( I have 2/3 of it in Bonds) into a 10 year CD to lock in the current 4.6% rate long term no matter how low the FFR goes?
We are able to cash flow most normal emergencies with our income and cash in checking, so we are unlikely to *need* access to our EF even with moderate sized expenses. It would take catastrophe to need access to the funds i.e. double job loss etc. I understand that some CD's give access to money before maturity without fees, or at least without egregious fees/penalties.
Thoughts? If moving into a CD makes sense, would doing so now with current rates make sense, or will 10 year rates likely go up given the certainty of a couple more FFR increases?