March 2026 – The Federal Reserve held its benchmark interest rate steady at its March 2026 meeting, but policymakers signaled that one to two rate cuts are likely before the end of Q3 2026. For retirees and pre-retirees weighing fixed annuities or multi-year guaranteed annuities, the clock is ticking. Annuity rates typically begin falling weeks or even months before the Fed officially acts, and that pattern appears to be playing out right now.
What the Fed Said and Why It Matters
Fed Chair Jerome Powell confirmed at the March press conference that the committee sees inflation continuing to cool, with the core PCE index now hovering near the 2.5% target. The dot plot showed a majority of officials penciling in at least one cut by mid-year and a second cut possible in Q3 2026.
That guidance sent the 10-year Treasury yield lower by roughly 15 basis points in the days following the meeting. That matters because fixed annuity and MYGA rates track the 10-year Treasury closely. When Treasury yields drop, carriers reprice their products within weeks, not months.
Annuity carriers don’t wait for the Fed to cut before adjusting rates. They adjust when markets price in the cut. The 10-year Treasury is already moving lower, and carrier rate sheets are following. This is not speculation – it is the normal pricing cycle, and it happened in 2019 and again in 2024.
The Rate Window Is Already Closing
Buyers who locked in MYGA rates during the 2024 and early 2025 peak are in an enviable position. Five-year MYGA rates that topped 5.75% at their peak have already softened. The best 5-year rates available today are still strong, but they are measurably lower than they were six months ago.
The math on acting now versus waiting is straightforward. Consider a $200,000 investment in a 5-year MYGA. At a 5.25% rate, the total interest over five years comes to roughly $58,000 on a compound basis. At 4.75% – a realistic post-cut scenario – that same investment earns closer to $52,700. That is a difference of approximately $5,300 in total earnings, simply from waiting a few months too long.
Those numbers are approximate and will vary by carrier and product, but the directional point holds. Rate cuts compress fixed annuity payouts. Every quarter buyers wait, they risk giving back a portion of the favorable environment that has existed since 2022.
What This Means for Annuity Buyers
If you have been sitting on cash, a CD that is maturing, or a portion of your portfolio earmarked for guaranteed income, now is a more compelling time to compare current MYGA rates than it was a year ago – not because rates are at their peak, but because the trajectory is clearly downward.
The historical pattern for annuity rate trends shows that carriers tend to cut 30 to 90 days ahead of the actual Fed move. Buyers who wait for the official Fed announcement to act will almost certainly be locking in after the best rates have already been pulled. The window is open now, and it will not stay open indefinitely.
The Bottom Line
A multi-year guaranteed annuity is one of the simplest ways to lock in a fixed return for a set number of years, without market risk. With Q2 rate cuts now a consensus expectation rather than a fringe forecast, the case for acting before those cuts arrive is straightforward.
Compare rates across multiple carriers. Look at 3-year, 5-year, and 7-year terms depending on when you need access to the funds. And understand how annuity rates are set so you can read the rate environment accurately – not just react to headlines after the fact.
Buyers who moved in late 2022 or early 2023, when rates were rising, are now well ahead. The buyers who act in Q1 or early Q2 2026 may find themselves in a similar position two years from now.
