The Federal Reserve made another pivotal move in late October 2025: a 25 basis-point cut to the federal funds rate, the second such cut in as many months. Both of these rate cuts bring the target range down to approximately 3.75%–4.00%. While this may seem like a modest adjustment, it’s already having ripple effects across the economy—and employers should be paying close attention for its impending affect on income verification fulfillment requests for their employees.
Why? Because lower interest rates often trigger a wave of financial activity among consumers. Employees across the country are likely to take advantage of this rate drop to refinance existing loans, apply for new mortgages, or consolidate debt. And when they do, they’ll need employment and income verification—fast.
The Avalanche Is Coming from Lower Interest Rates
Even before the Fed’s October cut became official, refinance applications were already up 81 percent compared with October 2025. In June 2025, applications were up 40% compared to the previous year. With rates now lower and the possibility of another cut in December, employers should brace for a new wave of verification requests.
Economists largely agree that rates will continue to drift downward, albeit gradually. Forecasts suggest a terminal rate in the 3.00%–3.50% range by the end of 2026. Goldman Sachs, Schroders, and the OECD all anticipate one to three additional cuts over the next year or so. But even modest easing can unleash pent-up demand from employees who’ve been waiting for the right moment to make major financial moves.
What This Means for Employers
For HR, Payroll and Share Services teams, this surge in activity translates into a spike in verification fulfillment workload. Each loan, refinance, or financial application typically requires employment and income verification. Multiply that by hundreds—or thousands—of employees, and the administrative burden becomes significant.
But it’s not just about volume. Security, speed, and accuracy are critical. Employees expect their information to be handled professionally and promptly. Financial institutions require precise data. And employers must ensure compliance with privacy regulations and internal policies.
Experian Employer Services is seeing an overall increase in verification requests from the lending and mortgage industries in line with the rate reductions. With year-end activities quickly approaching, our services provide peace of mind for HR and payroll teams who have a lot of work to manage already without a surge in verification requests.
How Experian Employer Services Can Help
Experian Employer Services is built to support employers during high-demand periods like this. Our verification fulfillment solutions are designed to:
- Save Time: Automate and streamline the verification process so your HR team can focus on better serving your workforce.
- Protect the Employee Experience: Ensure that employees’ lending and financial institutions receive timely, accurate responses to their verification needs—without delays or errors.
- Maintain Security and Compliance: Our systems are built with robust data protection protocols to safeguard sensitive employee information.
Best Practices for Managing the Surge
To prepare for the influx of verification requests, consider working with a trusted partner like Experian Employer Services. With us, employers can benefit from time savings, enhanced security, and a better overall employee experience for their workforce. There are often many competing priorities for internal resources. Devoting a large portion to a verification surge can be inefficient and detract from fiscal year goals and objectives. Furthermore, manual, internal verification responses can open an employer up to serious security risks from bad actors posing as verifiers who are seeking your employees’ data. Finally, fast and secure responses are expected by employees who are making big life decisions. The last thing an employer should be is a hinderance to their employee accomplishing their financial goals.
Looking Ahead: What Employers Should Expect
While the Fed’s next move isn’t guaranteed, Chair Jerome Powell has signaled that further cuts are possible but not certain. Inflation remains above target, and the labor market is showing signs of weakness—both key factors in the Fed’s decision-making. In short, the current rate environment is likely to persist into 2026, with gradual easing rather than dramatic shifts. But even small changes can have big implications for employee financial behavior—and for your HR operations.
Final Thoughts
Lower interest rates are good news for employees who are eager to improve their financial situations. But for employers, they bring a new set of challenges. By preparing now and partnering with a trusted provider like Experian Employer Services, you can manage the surge in verification requests efficiently and securely.
Don’t let your team get buried under an avalanche of paperwork. Let us help you streamline the process, protect your employees’ experience, and stay ahead of the curve.
Learn more about how Experian Employer Services can support your verification needs here.