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If your only choice is a fund, the intermediate fund would be better. Its net asset value (NAV) will rise, as the rates are cut.

Not necesarrily. This would assume intermediate term interest rates would follow Fed cuts, which may not happen (Greenspan's "conundrum," a.k.a., supply and demand is more complicated that rate ruts by the Fed). Also continued rate cuts by the Fed are not a certaintly, despite Wall Street's "what do we care about inflation, bail us out for our reckless investments" attitude.

At the moment how to work from an intermediate bond index fund allocation is unclear. A ladder with the equivalent yield would be safer over the long term (on the beleif that interest rates remain artificially low for the amount of debt). But there aren't any screaming alternatives, like Pen Fed CDs paying 100 basis points higher or TIPS over 2.5% with low inflation expectations. It might be best to sit tight, but make sure you have account transfers in operating condition (and a Pen Fed account, retirement if needed), so if opportunities arise, say in January, you can start moving money into safer places.
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