Many banks tie the APY that CDs earn to the federal funds rate established by the Federal Reserve. The federal funds rate is the rate banks use to lend and borrow money. The rates on CDs can rise and fall based on actions taken by the Fed to regulate the health of the economy. For instance, the sequence of Fed rate hikes to counter inflation over the last period has caused APYs to increase. If the Fed decides to decrease rates, savings rates will likely start a downward trend.