The Federal Reserve is expected to cut interest rates on Wednesday, and wealthy U.S. households may benefit most.

The federal funds rate is the interest rate at which banks borrow and lend to one another overnight. A quarter-point reduction would bring the benchmark rate to a range between 3.75%-4.00%. It could fall to 3.1% by the end of 2027, according to a September forecast from the Federal Open Market Committee.

"That really sets the floor for all other interest rates," said Michael Wagner, co-founder of Omnia Family Wealth in Aventura, Florida. "We ultimately start earning less money on cash, which makes it less attractive versus other investments."

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