Social Security COLAs: What You Need to Know After the Fed’s Rate Cut

Core Points - The Federal Reserve has cut its benchmark interest rate by a quarter of a point, marking its third consecutive rate cut of the year [2] - Social Security cost-of-living adjustments (COLAs) are designed to keep benefits in line with inflation and are automatically eligible each year [3][4] - The upcoming 2.8% COLA for Social Security recipients in 2026 is unaffected by the Fed's recent rate cuts, as COLAs are tied to inflation rather than interest rates [5][6] Impact of Fed's Rate Cuts - While the Fed does not directly set Social Security COLAs, its actions can indirectly influence future COLAs by affecting inflation [7][8] - Lower interest rates may stimulate consumer spending, which could lead to higher prices and potentially increase CPI-W numbers, resulting in larger future COLAs [9]