Watch Margaret Brennan’s full interview with Bank of America CEO Brian Moynihan, a portion of which aired on Dec. 28, 2025. Editor’s note: This interview was recorded on Dec. 17, 2025.
contributed to this report.
Tag: Federal Reserve
-
Why 2026 Could Be a Dream Year for Investors: And Where Bitcoin Fits In?
Fed is ending QT, Trump is calling for a massive rate reduction, and more.
In hindsight, 2025 was already an incredible year for (almost) all investment assets. Unless there’s enhanced volatility in the few remaining days of 2025, the S&P 500 is about to close with an 18% surge, the Nasdaq Composite with a 22% increase, and the Dow Jones Industrial Average with a 15% jump.
And then, there are the precious metals. The two largest – gold and silver – had their best year to date, with multiple new all-time highs. Gold is up by 75% YTD, while silver has become the third-largest global asset after a 172% surge since January’s opening price as its market cap has shot up to $4.5 trillion.
If there’s one big disappointing asset class, it’s actually cryptocurrencies. Although BTC and several altcoins marked fresh peaks throughout the year, most are about to end 2025 in the red. But now, the popular analysts at the Kobeissi Letter believe 2026 will be even better, and the question is: can crypto overperform?
2026 to Be Incredible?
2026 is going to be incredible:
Trump is calling for interest rates to 1% and promising stimulus checks, AI CapEx is nearing $1 trillion per year, and precious metals are making history.
All as mass de-regulation is in full swing and the US and China are in an all-out AI arms…
— The Kobeissi Letter (@KobeissiLetter) December 27, 2025
Some of the reasons why the analysts believe investors should expect a massive 2026 include the AI boom, including the China-US war on it, the mass deregulation in the sector, midterm elections in the States, growing retail participation in certain markets, and the Fed’s policy.
The US central bank has already reduced the key interest rates three consecutive times in 2025, and it ended its quantitative tightening policy. It’s expected to continue cutting the rates next year, especially with a new Fed Chair on board. Trump has called for 1% interest rates and has also promised stimulus checks from the tariffs.
Will Crypto Join?
As mentioned above, bitcoin and the altcoins have mostly underperformed on an annual basis. If all the factors above align, risk-on assets like the digital asset industry should thrive, at least in theory, especially if US borrowing becomes even cheaper, and other asset classes, such as precious metals and stocks, reach a decisive peak.
You may also like:
Experts anticipate capital rotation into more lucrative industries, including crypto. AI would likely continue to be the most favorable niche, but BTC has become a lot more legitimate among institutional investors, especially since the Trump administration took office.
In any case, 2026 is indeed shaping up to be quite eventful for all financial markets, but bitcoin and the altcoins have a long path to catch up after the controversial 2025. Or, perhaps they now have more room for growth.
SPECIAL OFFER (Exclusive)
SECRET PARTNERSHIP BONUS for CryptoPotato readers: Use this link to register and unlock $1,500 in exclusive BingX Exchange rewards (limited time offer).Jordan Lyanchev
Source link -
The Fed may have reassured Powell that it’s safe to leave the board early when a new chair takes over. ‘I think he’s done with this job’ | Fortune
After enduring a string of attacks on the Federal Reserve, Jerome Powell may now feel confident that the central bank is in good enough hands to step away completely when a new chair takes over.
Earlier this month, the Fed reappointed its regional bank presidents a bit earlier than usual, surprising Wall Street and easing concerns about its independence in the face of President Donald Trump’s continued demands for steeper rate cuts.
It came after recent suggestions from the Trump administration that new conditions ought to be placed on the Fed presidents, raising fears it was eyeing a purge. That fit a pattern of extreme pressure on policymakers. Trump has relentlessly insulted Powell for not easing more, considered firing him, threatened to sue over cost overruns on the Fed’s headquarters renovation, and is still attempting to oust Governor Lisa Cook.
Given Powell’s commitment to Fed independence, there were doubts that he would leave the board of governors when his replacement as chair comes in, bucking tradition, in order to retain a vote on the rate-setting Federal Open Market Committee and help ensure policy stays apolitical. His term as chair expires on May 15, 2026, but his term as a governor extends to January 2028.
But with the regional presidents re-upped, that adds some stability to the FOMC, which is comprised of governors and presidents, potentially letting him ride off into the sunset.
“I don’t think Powell wants to stay. I think he’s done with this job, and I don’t blame him,” Christopher Hodge, chief U.S. economist at Natixis CIB Americas, told Fortune.
He put a high probability on Powell leaving the board, but a few uncertainties remain. One is Trump’s pick to be the new Fed chair. The current names under consideration—Kevin Hassett, Kevin Warsh, and Chis Waller—would be palatable, but an unserious candidate from left field would give Powell pause, according to Hodge, who previously served as principal economist at the New York Fed.
Another unknown is how the Supreme Court will rule in Trump’s effort to fire Cook over mortgage fraud claims, which she had denied. If the justices determine the White House can easily dismiss governors, then Powell might stay on.
“But ultimately, I think this reappointment of these regional Fed presidents is a barrier that he wanted to get over, and I think that certainly helped clear the way for him stepping down after the meeting in May,” Hodge said.
He added, “as long as Powell is fairly certain that the guardrails are staying in place, and that the Fed is in a long-run position to stay credible, then I think he’s going to step down” from the board of governors.
Robert Kaplan, vice chairman at Goldman Sachs and former president of the Dallas Fed, said the reappointment of the Fed presidents was big news that didn’t get much attention.
He told CNBC last week there was some concern that a reshuffling on the board of governors would lead to changes in the Fed presidents, who must be approved by the governors.
“I think it’s possible that that won’t happen. And that means the next Fed chair will have to get seven votes through persuasion and debate and getting a consensus. You won’t come in with seven votes wired,” Kaplan added, referring to the votes need for a majority on the 12-member FOMC.
He also urged Powell to not remain on the board when his term as chairman expires. If Powell hangs on, he might be seen as a thorn in the side of the new chair, Kaplan explained.
“In the same way a CEO would leave and leave it to their successor, I think that’s the gracious thing to do,” he said. “I think Jay is a gracious person, and I think it’s the right thing for him to do.”
Jason Ma
Source link -
Scammers are staking out Americans’ front doors in a wily new debit card scheme. How the scam works and what to do
Envato Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.
You may think that credit cards are the payment method most targeted by financial fraudsters, but that’s not true. It’s, in fact, debit cards that fraudsters pursue most — and the number of cases involving them keeps increasing, according to a Federal Reserve survey of financial institutions (1). And the reasons why this may leave you more vulnerable to financial loss may also surprise you.
When you think of debit card scams, you might imagine people having their debit cards physically stolen or their card numbers and PINs skimmed. But there are other debit card scams on the rise that are even more complex. And, as with other scams, having information on how they work may mean the difference between keeping your finances intact and becoming the next fraud victim.
As the Detroit Free Press recently reported, new debit card scams are popping up and gaining momentum (2). One of the most bizarre ones starts with banking customers being warned that there’s a problem with their account, which is a common theme for financial scams.
Next, victims are told to destroy their debit cards but leave the chip on the front of the card intact for security purposes. The scammers then steal the chips by sending a “bank representative” out to pick up the destroyed cards with the chips intact and use social engineering to get the PIN numbers needed to use the cards. With the chip and the PIN, they can then steal funds from the victim’s bank account.
Of course, debit card fraud isn’t the only thing consumers have to worry about. Check fraud has also been on the rise, increasing 10% in 2024 from the prior year, the Federal Reserve survey also found.
The Independent Community Bankers of America has been working with the U.S. Postal Inspection Service to educate customers on check fraud via handouts at different banking locations.
Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)’
Financial fraud is a problem in general, although, as a consumer, you may be at risk of greater losses if your debit card or checking account is targeted.
-
California, other states file suit to prevent shutdown of federal consumer agency
California joined 20 other states and the District of Columbia on Monday in a lawsuit that seeks to prevent the federal Consumer Financial Protection Bureau from being defunded and closed by the Trump administration.
The legal action filed in U.S. District Court in Eugene, Ore., by the Democratic attorneys general accuses Acting Director Russell Vought of trying to illegally withhold funds from the agency by unlawfully interpreting its funding statute. Also named as defendants are the agency itself and the Federal Reserve’s Board of Governors.
“For California, the CFPB has been an invaluable enforcement partner, working hand in hand with our office to protect pocketbooks and stop unfair business practices. But once again, the Trump administration is trying to weaken and ultimately dismantle the CFPB,” California Atty. Gen. Rob Bonta said in a news conference to announce the 41-page legal action.
The lawsuit asserts that the agency is crucial for states to carry out their own consumer protection mission and that its closure would deprive them of their statutorily guaranteed access to a database run by the bureau that tracks millions of consumer complaints, as well as to other data.
The agency did not immediately respond to a request for comment about the lawsuit, led by Bonta and the attorneys general from Oregon, New York, New Jersey and Colorado.
Established by Congress in 2010 after the subprime mortgage abuses that gave rise to the financial crisis, the agency is funded by the Federal Reserve as a method of insulating it from political pressure.
The Dodd-Frank Act statute requires the agency’s director to petition for a reasonable amount of funding to carry out the CFPB’s duties from the “combined earnings” of the Federal Reserve System.
Before this year, that was interpreted to mean the Federal Reserve’s gross revenue. But an opinion from the Department of Justice claims that should be interpreted to mean the Federal Reserve’s profits, of which it has none, because it has been operating at a loss since 2022. The lawsuit alleges the interpretation is bogus.
“Defendant Russell T. Vought has worked tirelessly to terminate the CFPB’s operations by any means necessary — denying Plaintiffs access to CFPB resources to which they are statutorily entitled. In this action, Plaintiffs challenge Defendant Vought’s most recent effort to do so,” the federal lawsuit states.
The complaint alleges the agency will run out of cash by next month if the policy is not reversed. Bonta said he and other attorney generals have not decided whether they will seek a restraining order or temporary injunction to change the new funding policy.
Before the second Trump administraition, the CPFB boasted of returning nearly $21 billion to consumers nationwide through enforcement actions, including against Wells Fargo in San Francisco over a scandal involving the creation of accounts never sought by customers.
Other big cases have been brought against student loan servicer Navient for mishandling payments and other issues, as well as Toyota Motor Credit for charging higher interest rates to Black and Asian customers.
However, this year the agency has dropped notable cases. It terminated early a consent order reached with Citibank over allegations it discriminated against customers with Armenian surnames in Los Angeles County.
It also dropped a lawsuit against Zelle that accused Wells Fargo, JPMorgan Chase, Bank of America and other banks of rushing the payment app into service, leading to $870 million in fraud-related losses by users. The app denied the allegations.
Vought was a chief architect of Project 2025, a Heritage Foundation blueprint to reduce the size and power of the federal bureaucracy during a second Trump administration. In February, he ordered the agency to stop nearly all its work and has been seeking to drastically downsize it since.
The lawsuit filed Monday is the latest legal effort to keep the agency in business.
A lawsuit filed in February by National Treasury Employees Union and consumer groups accuses the Trump administration and Vought of attempting to unconstitutionally abolish the agency, created by an act of Congress.
“It is deflating, and it is unfortunate that Congress is not defending the power of the purse,” Colorado Atty. Gen. Philip Weiser said during Monday’s news conference.
“At other times, Congress vigilantly safeguarded its authority, but because of political polarization and fear of criticizing this President, the Congress is not doing it,” he said.
Laurence Darmiento
Source link -
‘We are now firmly back in a good is bad/bad is good regime’: Weak job data may lead to more rate cuts and boost stocks, Morgan Stanley economist says | Fortune
Ahead of the highly anticipated November jobs data to be released this week, even lackluster numbers may be greeted with relief by Wall Street.
A moderately cooling labor market could increase the likelihood of more rate cuts by the Federal Reserve—a tantalizing prospect for many investors eying future earnings growth—fueling bullish behaviors in the stock market, according to Morgan Stanley analysts.
“We are now firmly back in a good is bad/bad is good regime,” Michael Wilson, chief U.S. equity strategist and chief investment officer for Morgan Stanley, wrote in a note to investors on Monday.
Fed Chair Jerome Powell’s divisive cut last week, the Fed’s third cut in as many meetings, was based on consistent data showing a softening job market, including unemployment rising three months in a row through September, and the private sector shedding 32,000 jobs last month, per ADP’s November report.
According to Powell, the quarter-point cut was defensive and a way to prevent the labor market from tumbling, adding that while inflation sits at about 2.8%, which is higher than the Fed’s preferred 2%, he said he expects inflation to peak early next year, barring no additional tariffs.
He added that monthly jobs data may have been overcounted by about 60,000 as a result of data collection errors, and that payroll gains may actually be stagnant or even negative.
“I think a world where job creation is negative…we need to watch that very carefully,” Powell said at the press conference directly following the announcement of the rate cut.
Wilson suggested that Powell’s emphasis on the jobs data, as well as his de-emphasis on tariff-caused inflation, makes the labor market a crucial factor in monetary policy going into 2026.
As a result of the government shutdown, the Labor Department’s job market report will be released on Tuesday, which will contain data from both October and November, and is expected to show a modest 50,000 payroll gain in November, with the unemployment rate ticking up from 4.4% to about 4.5%, consistent with the trend of a labor market that is slowing, but not suddenly bottoming out.
‘Rolling recovery’ versus plain bad news
The Morgan Stanley strategist has previously argued that weak payroll numbers are actually a sign of a “rolling recovery,” with the economy in the early stages of an upswing slowly making its way through each sector. It follows three years of a “rolling recession” that Wilson said had kept the economy weaker than what employment and GDP figures suggested.
In Wilson’s eyes, because jobs data is a lagging metric, the trough of the labor cycle was actually back in the spring, coinciding with mass DOGE firings and “Liberation Day” tariffs. For a more accurate representation of the health of the economy, Wilson argued to look instead at the markets. The S&P 500, for example, is up nearly 13% over the last six months.
However, with Powell basing his policy decisions on data such as jobs, Wilson noted, the Fed could still see more room to cut, even as Morgan Stanley sees a labor market that is not in jeopardy.
“In real time, the data has not been weak enough to justify cutting more,” Wilson told CNBC last week prior to the Fed meeting. “But when they actually look at the revisions now…it’s very clear that we had a significant labor cycle, and we’ve come out of it, which is very good.”
But just as economists weren’t in consensus for the FOMC’s most recent rate cut, the possibility of more meager jobs numbers is not universally favored.
Claudia Sahm, chief economist at New Century Advisors and a former Fed economist, agreed the job data is a lagging economic indicator, but warned it could indicate a recession is underway, not that we’re already in the clear. What was particularly concerning to her was that lagging labor data could bear worse job news, as layoffs have yet to surge following shrinking job openings.
She told Fortune ahead of the Fed’s decision last week that additional rate cuts would not be welcome news, but rather a sign the Fed had acted too late in trying to correct a battered labor market.
“If the Powell Fed ends up doing a lot more cuts, then we probably don’t have a good economy,” she said. “Be careful what you wish for.”
This story was originally featured on Fortune.com
Sasha Rogelberg
Source link -
Here’s Why Bitcoin’s Reaction To Fed Policy Turns Bearish After Each FOMC Update
The Bitcoin’s behavior around US Federal Reserve announcements has become one of the most consistent market patterns of the year. After every FOMC update, the world’s largest cryptocurrency has reacted with a noticeable downside move, underscoring how closely the asset is now tied to shifting interest-rate expectations and broader macro sentiment.
What Future FOMC Meetings Could Mean For Bitcoin
In an X post, analyst CryptoMichNL has mentioned that the Federal Reserve (FED) is preparing to update the printer from 2021 liquidity settings toward a more supportive 2025 stance. However, this doesn’t mean it will have an immediate impact on the markets, as these things take time. As a result of the update, Bitcoin has dropped after every Federal Open Market Committee (FOMC) meeting in 2025, but these moves are primarily aimed at flushing out longs through high liquidations.
According to the expert, the actual move on the markets and the direction should come in the next 1-2 weeks, which would give a better outlook going into 2026. The bullish trend has remained intact, and the thesis is still valid. However, BTC shouldn’t break the lows during the FOMC flush. Instead, it should break the $92,000 resistance zone to retest the $100,000 level.
Bitcoin is still moving in a choppy pattern, driven by illiquid order books and fast moves in both directions. CryptoMichNL has also highlighted that BTC is still in for a new upward breakout in the coming days to weeks. Despite the volatility, BTC has continued to form higher lows, which is a clear sign that an upward structure is building.
CryptoMichNL noted that, as the price doesn’t break down anymore, the heavy correction in the market was highly manipulated and not organic, which is very natural for the market to return to normal.
Why Bitcoin Market Structure Remains Intact Despite Deep Pullback
Bitcoin has not proven to be any different from the cycle. A full-time crypto trader and investor, Daan Crypto Trades, pointed out that the good initial bounce is right off the 0.382 Fibonacci retracement level, which is taken from the entire cycle move. Realistically, that was the lowest the price could go without breaking the broader weekly market structure.
According to Daan, the invalidation is clearly the higher-timeframe outlook, and the November lows would become a very uncomfortable place for the bulls. As the year comes to an end, a lot of the 4-year cycle selling should also be diminishing. Meanwhile, Q1 2026 is shaping up to be extremely important as it will likely reveal where the BTC cycle will move next.
Godspower Owie
Source link -
The Fed just ‘Trump-proofed’ itself with a unanimous move to preempt a potential leadership shakeup | Fortune
The Federal Reserve’s early reappointment of its regional bank presidents took markets by surprise and eased concerns the central bank would soon lose its independence as President Donald Trump continues demanding steeper rate cuts.
On Thursday, the Fed announced 11 out its 12 bank presidents were re-upped, except for the Atlanta Fed chief role as Raphael Bostic had announced previously that he’s stepping down.
The presidents’ five-year terms were due to end in February, and prior reappointments have typically come closer to expiration dates as they historically have been routine affairs. But recent suggestions from the Trump administration that new conditions ought to be placed on the presidents raised concerns it was seeking a wider leadership shakeup.
Earlier this month, Treasury Secretary Scott Bessent floated a three-year residency requirement for Fed presidents. Days later, National Economic Council Director Kevin Hassett, who is the frontrunner to become the next Fed chair, endorsed the idea.
While Fed presidents are nominated by governing boards drawn from their respective districts, the Fed’s board of governors approve them. As a result, tipping the balance of power on the Fed board with Trump appointees could conceivably give them the ability to reshape the Fed presidents as well.
Meanwhile, the rate-setting Federal Open Market Committee is comprised of the seven members of the Fed board, plus five of the 12 Fed presidents, with four of them rotating on an annual basis. In recent FOMC meetings—including Wednesday’s—Fed presidents have been more resistant to rate cuts while Trump-appointed governors have been more aggressive in calling for cuts.
Deutsche Bank strategist Jim Reid pointed out in a note on Friday the 10-year Treasury yield edged higher after the Fed’s reappointment announcement, as bond investors priced in fewer rate cuts.
“The regional presidents’ current terms expire in February so the advance announcement suggests that the Board was united in wanting to avoid the risk that the reappointment process raises questions over Fed independence,” he added.
Justin Wolfers, a professor of public policy and economics at the University of Michigan, was more blunt about the Fed’s surprise news.
“If I’m reading this properly, they just Trump-proofed the Fed,” he wrote in a post on X.
What’s also notable about the reappointment is the unanimous decision to bring back the Fed presidents suggests the Trump-appointed governors went along with it as well.
That includes Stephen Miran, who is on leave as the White House’s chairman of the Council of Economic Advisers while filling a vacancy on the Fed.
Prior to joining the administration, he had urged an overhaul of the Federal Reserve to give at-will power to the U.S. president to fire Fed board members and Fed bank presidents; hand over control of the Fed’s operating budget to Congress; and shift the Fed’s regulatory responsibility over banks and financial markets to the Treasury.
The changes would diminish the Fed’s power in favor of the White House so much analysts at JPMorgan warned earlier this year Miran’s appointment “fuels an existential threat as the administration looks likely to take aim at the Federal Reserve Act to permanently alter U.S. monetary and regulatory authority.”
Jason Ma
Source link -
Divided Fed lowers rates, signals pause and one 2026 cut as growth rebounds
NEW YORK: The Federal Reserve cut interest rates on Wednesday (Dec 10) in another divided vote, but signalled it will likely pause further reductions in borrowing costs as the US central bank looks for clearer signals about the direction of the job market and inflation that “remains somewhat elevated”.
New projections issued after the Fed’s two-day meeting showed the median policymaker sees just one-quarter-percentage-point cut in 2026, the same outlook as in September, with inflation expected to slow to around 2.4 per cent by the end of next year, even as economic growth accelerates to an above-trend 2.3 per cent and the unemployment rate remains at a moderate 4.4 per cent.
“In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data,” the rate-setting Federal Open Market Committee (FOMC) said in language that in the past has been used to signal a pause in policy actions – an outlook at odds with market expectations, which remained locked into two rate cuts next year even after the Fed issued its statement.
In a press conference following the release of the FOMC statement, Fed Chair Jerome Powell said: “I would note that having reduced our policy rate by 75 basis points since September and 175 basis points since last September, the fed funds rate is now within a broad range of estimates of its neutral value and we are well positioned to wait to see how the economy evolves”.
Powell added that “monetary policy is not on a preset course, and we will make our decisions on a meeting-by-meeting basis”.
-
Federal Reserve defers to Donald Trump by cutting interest rates by 25 points
The Federal Reserve, the central bank of the United States, voted to lower its federal funds rate—the interest rate that banks charge each other to borrow overnight and the cost of credit—by 25 basis points on Wednesday. This is the Fed’s third rate cut in as many months and the lowest federal funds rate in three years.
The move comes amid lackluster employment numbers and the Supreme Court hearing Trump v. Slaughter, a case in which it is likely to overturn Humphrey’s Executor, a decision that would likely grant the president license not only to remove executive agency bureaucrats but to replace the Fed’s Board of Governors. In view of these pressures, the Federal Open Market Committee (FOMC), led by Fed Chair Jerome Powell, may be preemptively catering to President Donald Trump’s calls to lower interest rates in a bid to avoid replacement if and when Humphrey’s Executor is overturned.
Trump has been egging the FOMC, the Fed’s key policymaking body, to lower rates since this summer. In June, the president sent Powell a letter saying, “we should be paying 1% Interest, or better!” In late July, with year-over-year inflation at 2.6 percent, well above the Fed’s 2 percent target, Powell and all but two members of the 12-member FOMC wisely held the fed funds target constant. However, in mid-September, the Fed decreased the fed funds rate by 25 basis points, lowering the upper bound rate from 4.5 percent to 4.25 percent.
Stephen Miran, nominated by Trump and confirmed as a member of the Fed’s Board of Governors in September, shortly before the fed funds announcement, dissented. Per the FOMC’s official statement, Miran “preferred to lower the target range for the federal funds rate by 1/2 percentage point.”
At the end of October, the FOMC lowered the fed funds rate by another 25 basis points, leaving the upper bound at 4.0 percent. Miran again dissented, preferring a 50 basis point decrease in the federal funds rate. Miran’s dissent was juxtaposed by Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, who voted against lowering the rate at all.
On Wednesday, Miran yet again objected to the FOMC’s decision to lower the fed funds rate by 25 basis points, preferring a 50-basis point drop. Schmid also dissented the same way he had in October, voting for no change whatsoever. On Wednesday, Schmid was joined in his opposition to rate cuts by Austan Goolsbee, president of the Federal Reserve Bank of Chicago. The Wall Street Journal notes that this is “the first time in six years that three officials cast dissents.”
But two members of the FOMC voting against further rate cuts should not be surprising: Year-over-year inflation has been stubbornly increasing since April. The Consumer Price Index, the most common inflation metric and the one used by the Bureau of Labor Statistics, rose from 2.3 percent in April to 3 percent in September. Meanwhile, the Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred inflation measure, increased from 2.3 percent to 2.8 percent. At the same time, the unemployment rate has increased from 4.2 percent to 4.4 percent, while the labor force participation rate decreased slightly from 62.6 percent to 62.4 percent.
Peter C. Earle, director of economics and economic freedom at the American Institute for Economic Research, tells Reason that the Fed’s decision to continue lowering interest rates in the face of persistently elevated inflation signals that “it has chosen to prioritize labor market softness over the purchasing power of the dollar and broader affordability concerns.” Earle says the latest cut is risky, but defensible, as “inflation projections for this year and 2026 have been revised lower, [while] unemployment forecasts remain steady, and private hiring data suggest a labor market that’s cooling.” More troubling than the decision itself is the phenomenon of “members aligning their votes with rapid, deeper cuts in line with what the President has expressed a desire for.”
Earle predicts that, “if presidential discretion over the Fed’s Board of Governors expands in the wake of Humphrey’s Executor [being overturned]…the result would be a Federal Reserve more vulnerable to serving the immediate priorities of the executive branch rather than maintaining consistent rules, stable money, and a predictable policy environment.” Such central bank would “weaken the dollar and undermine long-term investment planning,” warns Earle.
Jack Nicastro
Source link -
Federal Reserve lowers its benchmark interest rate by 0.25 percentage points in third straight cut
The Federal Reserve on Wednesday cut its benchmark interest rate by 0.25 percentage points, bringing the federal funds rate to its lowest level in more than three years.
The reduction lowers the federal funds rate — what banks charge each other for short-term loans — to between 3.5% and 3.75%, down from its prior range of 3.75% to 4%. The Fed’s decision marks the third consecutive rate cut since September, lowering the federal funds rate by a total of 0.75 percentage points this year.
Despite the lack of key government economic data because of the recent U.S. government shutdown, the Fed has been closely monitoring the slowdown in monthly job growth as well as rising inflation. Figures from ADP, which tracks private payrolls, showed that employers shed 32,000 jobs in November, a signal of continuing headwinds in the labor market.
Fed hints at one rate cut in 2026
But in announcing the decision, the Federal Reserve signaled that it may want to see more economic evidence to support additional rate cuts in 2026. In quarterly economic projections issued along with their latest statement, Fed officials signaled they expect to lower rates just once next year.
“In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook and the balance of risks,” the Federal Open Market Committee, or FOMC, said in its statement.
Speaking about the decision in a press conference on Wednesday afternoon, Fed Chair Jerome Powell said the central bank is “well positioned to wait to see how the economy evolves” before deciding on another cut.
“We’re going to get a great deal of data between now and the January meeting — the data we get will factor into our thinking,” Powell said, referring to the delayed November inflation and job reports that will be issued later this month. “We’re well-positioned to wait and see.”
The Federal Reserve also issued new U.S. inflation, economic growth and unemployment projections for 2026, forecasting that inflation will cool slightly next year while unemployment will remain unchanged from its current level of 4.4%.
Fed officials forecast that Personal Consumption Expenditures, the Fed’s favored inflation gauge, will cool to 2.4% next year, down from its median estimate of 2.9% in 2025. The nation’s gross domestic product could pick up to 2.3% in 2026, an acceleration from the Fed’s September forecast of 1.8%.
Ryan Sweet, chief global economist at Oxford Economics, said the latest Fed guidance sets it up for what he described in a note to investors as an “extended pause” in cutting rates.
“The Fed isn’t going to be able to help the labor market because of what ails it,” he added. “Rate cuts are unlikely to significantly boost the hiring rate, which is being depressed by overhiring, solid productivity growth, policy uncertainty, a rise in people with multiple jobs and less immigration. Monetary policy can’t solve many of these issues.”
The move lowers the federal funds rate to its lowest level since early November 2022, when policymakers lifted the range to 3.75% to 4%. At that time, the central bank was boosting rates — its most potent tool for curbing inflation — as inflation surged during the pandemic.
By cutting rates, the Fed is acting to spur hiring by making credit cheaper, allowing businesses to expand and hire at a lower cost. Consumers, meanwhile, tend to spend more when financing is less expensive, giving the broader economy an extra lift.
FOMC dissents
Not all members of the FOMC, the Fed’s rate-setting panel, agreed with the move to cut by a quarter point. While Fed Chair Jerome Powell was joined by eight other committee members in voting in favor of the reduction, three members dissented, the Fed said. That represents the most dissents in six years and is a sign of divisions on a committee that traditionally works by consensus.
FOMC members Austan Goolsbee and Jeffrey Schmid voted to maintain the previous range, while Stephen Miran voted in favor of a 0.5 percentage-point cut.
At the same time, the Fed is moving toward a leadership shift next year, with Powell set to end his term as chair in May 2026 and President Trump preparing to nominate his replacement.
“[T]he outlook from the Powell-led FOMC bears less than usual on future Fed policy decisions given the imminent change in leadership,” Jeff Schulze, head of economic and market strategy at ClearBridge Investments, said in an email.
Asked what his goals are during the last months of his term as chair, Powell said he’s focused on the U.S. economy.
“I want to turn over this job to whoever replaces me with the economy in really good shape,” he said. “All my efforts are to get to that place.”
-
Bitcoin’s Market Structure Strengthens Despite Slower Trading Activity — Here’s Why
Despite a noticeable cooldown in trading volumes, Bitcoin’s underlying market structure has continued to strengthen. The price action has stabilized within a narrow range as long-term holders maintain firm conviction. As more BTC flows into cold storage and supply on exchanges tightens, the market is transitioning from hype-driven swings to steady structural support.
How The Price Compression Builds Energy For A Larger Move
CIO and founder of MNFund and MNCapital, CryptoMichNL, emphasized that Bitcoin shares a strong correlation with the Nasdaq. While Nasdaq continues to show steady resilience, BTC has stalled behind. This mismatch creates a mispricing and market divergence, which is why the path toward $100,000 remains wide open and why the 4-year cycle thesis doesn’t hold up.
Related Reading
Recently, BTC saw a massive correction, dropping from $115,000 to $80,000 in just two weeks. During that same liquidation period, what LVisserLabs calls the rotation between Pure Vol vs. Pure Profitability or Beta vs. Quality has fallen sharply. Beta here refers to high-volatility, high-beta stocks, which are essentially tech stocks that drive the markets. Meanwhile, Quality means more risk-off assets, including high-quality, profitable, and stable companies.
BTC exhibiting momentum for a rally | Source: Chart from CryptoMichNL Currently, BTC has stalled after the sell-off, and the Beta assets have recovered substantially, implying that the stocks have inverted their loss with the big drop and are now grinding upwards, signaling that risk-on appetite is clearly back. With this kind of structural divergence, it’s likely that in the coming weeks or months, BTC will grind upward to $110,000 and $115,000 levels, reversing the drop as the entire correction was a little dubious.
CryptoMichNL advised that instead of relying on a time-based sounding the 4-year cycle assumption, it is better to focus on the charts and macro relationships that directly influence BTC price.
On-Chain Activity Shows Clear Confidence From Big Money
The ambassador of StandXOfficial and the KOL of Binance, who is also an advisor at KOLsAgency, Investor Ucan, has highlighted that the evidence of Bitcoin’s latest upward move is already on-chain. The last six hours have revealed a clear surge of institutional demand. On-chain data shows that Binance purchased 7,298 BTC, Coinbase bought 1,362 BTC, Wintermute bought 2,174 BTC, BlacRock bought 1,362 BTC, and an unknown whale bought 6,192 BTC. In total, 20,438 BTC were purchased in just six hours, valued at approximately $1.9 billion.
Related Reading
Ucan noted that the timing of this purchase is what stands out. These inflows hit the market hours before the Federal Reserve’s upcoming employment data was released. Institutional is clearly expecting a supportive outcome. A positive print refers to easing expectations and fresh liquidity on the horizon. Retail traders are reacting, and the institutions are anticipating early. If the Fed confirms what these flows imply, today’s buying won’t look like simple momentum, but preparation.
BTC trading at $92,087 on the 1D chart | Source: BTCUSDT on Tradingview.com Featured image from Pixabay, chart from Tradingview.com
Godspower Owie
Source link -
Video: Trump Attacks Fed Governors Ahead of Key Interest Rate Meeting
new video loaded: Trump Attacks Fed Governors Ahead of Key Interest Rate Meeting
transcript
transcript
Trump Attacks Fed Governors Ahead of Key Interest Rate Meeting
During a speech in Pennsylvania focused on the economy, President Trump criticized the Fed chair, Jerome Powell, and four other members. The attack came as the Fed prepares to reveal new interest rates.
-
“We have a bad head of the Fed. You know who ‘too late’ is? ‘Too late’ Powell? Jerome ‘too late’ — he’s too late with his interest rates for a reason. He’s a bad guy. He’s not a smart guy, but he’s a bad guy. Well, this is a nice crowd.” “I think the risk of of higher, more persistent inflation has declined.” “I just heard it could be that all four commissioners in the Fed signed by Biden — I hear that the autopen… … They put people there that are not authorized to be there.”
During a speech in Pennsylvania focused on the economy, President Trump criticized the Fed chair, Jerome Powell, and four other members. The attack came as the Fed prepares to reveal new interest rates.By Shawn Paik
December 10, 2025
Shawn Paik
Source link -
-
The US economy added 119,000 jobs in September, but unemployment rose to a nearly four-year high
(CNN) — A long-awaited jobs report offered a mixed picture of the US labor market.
The economy added 119,000 jobs in September, an unexpected rebound for the labor market — but it comes as the overall economy shows signs of slowing.
Economists were expecting 50,000 jobs to have been added and an unemployment rate that remained at 4.3%, according to FactSet.
Delayed for seven weeks due to the government shutdown, the latest snapshot of America’s job market showed that unemployment rose in September to the highest level in nearly four years.
In addition, August’s tepid job gains of 22,000 were revised to a job loss of 4,000 jobs and July was revised down by 7,000 jobs, according to Bureau of Labor Statistics data released Thursday.
The health care and social assistance sector continued to drive overall employment growth. Those sectors added an estimated 57,100 jobs in September, accounting for nearly half of the overall gains. Leisure and hospitality contributed 47,000 jobs during a month with unseasonably warm weather.
Jobs were lost in sectors such as transportation and warehousing (-25,300), temporary help services (-15,900) and manufacturing (-6,000).
Although the September employment data has been on the shelf since early October, it provides a critical snapshot of the labor market at a time when tariffs, stubborn inflation and elevated interest rates continue to slow the US economy.
Summer of job losses
Plus, Thursday’s report might very well be the last clean jobs report for a couple of months, since the shutdown mucked up the finely tuned process of data collection and analysis during October and part of November. The BLS on Wednesday announced that there will not be a separate October jobs report published but instead some of that data will be included in the November report scheduled for December 16.
Despite the stronger-than-expected September gains, this year is still on pace for the weakest employment growth since the pandemic and, before that, the Great Financial Crisis.
“The job market was really weak in the summer, and it didn’t improve much in September,” said Heather Long, chief economist at Navy Credit Union. “What we learned today is that both June and August had negative job growth, so, shedding jobs; 119,000 is pretty good for September, but when you step back, the average (monthly job gain) of the past four months is in the low 40,000s.”
“So, it looks very weak,” she added.
Unemployment, a closely watched recession indicator, ticked higher in September, rising to the highest rate since October 2021.
However, driving the jobless rate higher was an increase in the labor force – primarily an uplift in more people looking for work, versus a sharp increase in layoffs, BLS data shows.
Low-fire, low-hire, low-opportunity market
The job gains remain heavily concentrated. Two sectors – health care and social assistance, and leisure and hospitality – accounted for 87% of September’s job growth.
But in a labor market that’s been in a low-hire, low-fire slog, there are also few opportunities for those seeking work. On average, it’s taking people six months to find work, according to the latest BLS data.
The latest unemployment claims data supports that trend: In a separate report on Thursday, the Labor Department reported that an estimated 1.974 million people filed continuing claims for unemployment insurance for the week ended November 8, hitting a fresh four-year high.
Initial claims, which are considered the best proxy for layoff activity, fell to 220,000 last week, remaining well below more concerning thresholds (300,000 to 400,000 range, consistently).
“If I had to characterize it, it still looks a lot like ‘no-hire, no-fire,’” Long said. “I do worry, given the number of industries that are starting to fire, that this is starting to look like ‘no-hire, start-to-fire.’”
‘Cold water’ for a Fed cut
Despite the mixed bag of data, the September report “could throw cold water” on the Federal Reserve cutting interest rates further when it meets in December, Kathy Bostjancic, chief economist at Nationwide, wrote in a note on Thursday.
“The sharp rebound in employment gains, up 119,000 in September following the downwardly revised negative 4,000 print in August soothes concerns that the labor market was on the precipice of a large downturn and removes urgency for another rate cut,” she wrote.
Still, because of the historic government shutdown, the September jobs report will be the freshest official monthly employment snapshot available when the Fed makes its next interest rate decision on December 10. The partial October and full November data won’t come out until the following week.
Related
Alicia Wallace and CNN
Source link -
Video: What the Jobs Report Tells Us About the Economy
new video loaded: What the Jobs Report Tells Us About the Economy
What does the September jobs report, delayed by six weeks because of the government shutdown, say about the economy? Lydia DePillis, our economics reporter, describes how the report, which was better than expected, comes at a moment of deep uncertainty.By Lydia DePillis, Claire Hogan, Stephanie Swart, Gabriel Blanco and Jacqueline Gu
November 21, 2025
Lydia DePillis, Claire Hogan, Stephanie Swart, Gabriel Blanco and Jacqueline Gu
Source link -
Bitcoin has shed almost $800 billion since its October peak. What’s behind the plunge?
Bitcoin continued to slide on Friday, extending a weeks-long slump that has wiped out nearly $800 billion in value since the cryptocurrency hit its 2025 peak last month. The downturn has stripped away all of bitcoin’s gains this year — and raised questions about where it might go from here.
Since closing at almost $125,000 on Oct. 6, its highest price this year, bitcoin has shed about one-third of its value. On Friday, bitcoin sank below $82,000 before rebounding slightly to $83,509 before noon EDT, according to CoinGecko, a cryptocurrency data aggregator.
The cryptocurrency, which is trading at its lowest level since April, is now on track for its worst monthly performance since 2022, when a spate of corporate collapses sparked turbulence in the crypto sector, Bloomberg reported Friday.
The precipitous drop comes as Wall Street grapples with unease over whether there’s a bubble in artificial technology and tech stocks, prompting a shift away from assets that are viewed as carrying more risk, analysts say. Investors are also cautious given signs of weakness in the labor market, and the outlook for the Federal Reserve’s interest rate decision next month, with more economists now expecting the Fed to hold off on cutting rates.
“The future is uncertain. It almost feels like it’s moving back to the question: do I even want to hold [bitcoin] in this environment?” said Thomas Chen, the CEO of cryptocurrency company Function, in an email.
Why is Bitcoin falling?
Concerns about an AI bubble can translate into turbulence for cryptocurrencies because tech stocks tend to move in tandem with bitcoin, experts noted.
“When tech sneezes, it’s natural to expect Bitcoin to catch a cold,” noted Nic Puckrin, investment analyst and co-founder of The Coin Bureau, in an email.
Aside from pulling back from riskier assets, some investors may be selling bitcoin to cover margin calls. Coinbase, for example, now offers “perpetual futures,” a product that lets traders use up to 10-to-1 leverage on bitcoin and other cryptocurrencies.
Leveraged positions can force investors to sell because borrowing amplifies every price move — for both gains and losses. Even a small drop in the underlying asset can lead to an outsized loss on a leveraged trade. But if an asset tumbles and the investor can’t meet the margin requirements, the trading platform may automatically liquidate the position, which leads to more selling and downward pressure on its price.
“When traders borrow heavily to magnify positions, any reversal triggers liquidations that accelerate the move,” Nigel Green, CEO of deVere Group, a financial advisory organization, said in an email.
Large declines in bitcoin’s price aren’t unusual, and the cryptocurrency has always rebounded, experts noted.
Brian Vieten, a research analyst at Siebert Financial, said in a Tuesday email that bitcoin has historically experienced around five corrections of 20-30% or more during bull markets, adding that the issues may represent “temporary headwinds” as some investors could view lower crypto prices as a buying opportunity.
-
Is the Federal Reserve likely to cut interest rates in December? Here’s what economists say.
Just a few weeks ago, a December interest rate cut was viewed as practically a done deal by many economists. Now, with fresh government data showing solid U.S. job growth in September, many forecasters think the Federal Reserve is likely to hold off lowering borrowing costs when policy makers meet next month.
The probability of a Federal Reserve rate cut now stands at 22%, down from a likelihood of 97% as of mid-October, according to economists polled by financial data company FactSet. CME Fedwatch, a tool that forecasts rate cuts based on changes in the 30-Day Fed Funds futures prices, gives slightly better odds of a reduction, at about 41%.
Translation: Wall Street economists and traders alike expect the Fed to leave rates unchanged at its next two-day meeting on Dec. 9-10. That would amount to a pause in the central bank’s recent move to lower lending rates, coming after two consecutive cuts in September and October.
The shift in expectations for future Fed rate cuts follows a six-week blackout in federal economic data because of the government shutdown, a hiatus that hindered the central bank’s ability to assess key economic trends. Last month, Fed Chair Jerome Powell cautioned that a December rate cut wasn’t a “foregone conclusion,” pointing to signs that the job market remains on firm ground.
The Fed is more likely to lower its benchmark federal funds rate — or what banks charge each other for short-term loans — if officials conclude that the job market and broader economic growth are in danger of stalling. But Thursday’s jobs data showed that employers continued to hire at a healthy clip in September.
“Given that today’s numbers were not a bad as feared, in conjunction with hawkish statements from the Fed recently, it does appear that the Fed will skip a cut in December,” Preston Caldwell, chief U.S. economist at Morningstar, said in an email.
He added, “But with the negative trend in labor markets remaining in place, we’d expect the Fed to resume cutting in their next meeting in January 2026, if they don’t cut this December.”
The federal funds rate is currently sitting in a range of 3.75% to 4%.
A move by the Fed to dial back rate cuts in 2026 could keep borrowing costs for homes and cars elevated. Pricier mortgages and auto loans are also reinforcing the feeling among many Americans, reflected in sentiment polls, that the cost of living remains too high.
Mixed economic picture
The Federal Reserve’s so-called dual mandate requires monetary policymakers to keep both inflation and unemployment in check. The central bank cited the slowing labor market when it twice trimmed borrowing costs this fall.
But the latest payroll gains released Thursday showed that employers hired 119,000 people in September — more than double what most economists had forecast. The nation’s unemployment rate ticked up from 4.3% to 4.4%, the highest level since October of 2021. The increase in the jobless rate suggests more people are re-entering the workforce to search for a job, economists said.
At the same time, inflation has edged up, climbing at an annual rate of 3% in September. That puts pressure on the Fed to keep price increases from spiraling higher, with some policymakers expressing concern over persistent inflation.
The mixed economic picture is complicated by the absence of more recent official data. The Bureau of Labor Statistics said this week that it will fold some October jobs data into its November report, which is set for release after the Fed’s next meeting, on Dec. 16.
“September’s payroll numbers may have surprised to the upside, but in terms of the Fed’s December interest rate decision, October is what mattered,” Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said in an email. “With that data now delayed until after the FOMC meeting, the Fed’s rate-cut path has more question marks.”
She added, “Overall, the available economic data has supported a December cut, but given the Fed’s cautious bent, it may choose to wait until it has more numbers in hand.”
-
America’s path out of $38 trillion national debt crisis likely involves pushing up inflation and ‘eroding Fed independence,’ says JPMorgan Private Bank | Fortune
While optimistic economists argue that America can grow its way out of a debt crisis, pessimists believe the real outcome will be somewhat less popular.
Business leaders, policymakers, and investors are growing increasingly concerned by the United States’s borrowing burden, currently sitting at $38.15 trillion. The worry isn’t necessarily the size of this debt, but rather America’s debt-to-GDP ratio—and hence, its ability to convince investors that it can reliably pay back that debt. It currently stands at about 120%.
To reduce that ratio requires either GDP to increase or scaling down the debt. On the latter end, this could include cutting public spending. This was already tried by the Trump administration, with the Department of Government Efficiency (DOGE) under Elon Musk claiming to have saved $214 billion.
While those savings were drastically lower than promises made by the Tesla CEO when DOGE was first formed, and they’re a drop in the ocean of the bigger U.S. deficit picture, it does reveal the renewed focus Washington is giving to debt.
This will be a prevailing theme for investors as well, according to JPMorgan Private Bank’s outlook for 2026. (The ban serves high net worth individuals.) The report, released today, says there are three issues investors need to bear in mind: Position for the AI revolution, get comfortable with fragmentation over globalization, and prepare for a structural shift in inflation.
It is this final part, a shift in inflation, which is where the debt question comes in.
JPMorgan writes: “Some market participants warn of a coming U.S. debt crisis. In the most extreme scenario, the Treasury holds an auction and buyers are nowhere to be found. We see a more subtle risk. In this scenario, instead of a sudden spike in yields, policymakers make a deliberate shift. They tolerate stronger growth and higher inflation, allowing real interest rates to fall and the debt burden to shrink over time.”
A key snag in the plan is the toleration of higher inflation: After all, this is the remit of the Federal Reserve’s Open Market Committee (FOMC), which is tasked with keeping inflation as close to 2% as possible. While the FOMC could be swayed to take a broader view than its dual mandate of stable prices and maximum employment if a national debt crisis impacted these factors, it may need more than arguments from politicians.
The method of allowing the debt burden to shrink thanks to lower rates is called financial repression, and could have knock-on effects on other parts of the economy over time. For example, Fortune reported over the weekend that America’s housing crisis happened, in part, due to a period of sustained low rates after the financial crisis.
To orchestrate this repression could take some maneuvering, JPMorgan says: “We could see a less straightforward path to reduce the U.S. government’s debt load. Policymakers could erode Fed independence and effectively inflate the debt away by driving a stronger nominal growth environment characterized by higher inflation and, over the near term at least, lower real interest rates.”
The less popular route
Economists have previously described the looming debt crisis as a game of “chicken” to Fortune, as one administration passes the issue on to the next without plucking up the courage to address fundamental spending or revenue-raising changes.
With an ageing American population, any government move to scale back social and healthcare spending would be likely be unpopular enough to prevent it from coming to fruition, the bank says. Likewise, increasing taxes are a sure-fire way to turn off voters.
The report adds: “U.S. tax collections as a share of GDP are near the low end among OECD nations, suggesting ample capacity—if not the political will—to raise tax revenue to reduce debt. Similarly, mandatory spending on entitlement programs such as Social Security and Medicare could be curtailed to ‘bend the curve,’ as economists refer to efforts to slow the pace of future spending growth. But those options may prove politically unpalatable.”
That said, the Trump administration has mustered some “peculiar” proposals for increasing revenue, without too much pushback from the public. One option is foreign cash, with the president claiming his “gold card” visa scheme could generate up to $50 trillion by selling cards to would-be American citizens at a price tag of $5 million apiece. However, America is already home to the majority of the world’s millionaires and the U.S. may struggle to find individuals who could afford such a card.
Then, of course, there are tariffs, which raked in a record $31 billion in August. Debate is rife about whether U.S. consumers will end up ultimately paying for the policy, or whether the cost will be “eaten” by foreign firms. With a lack of data during the government shutdown, there’s no way to see whether that inflationary pressure is being passed through yet.
The good news is, “at the moment, investors seem comfortable financing the U.S. government’s debt,” the outlook report added. At the time of writing, U.S. 30-year treasury yields sit at 4.7%, similar to where they began 2025, suggesting buyers of American borrowing are not yet demanding higher premiums to be enticed.
JPMorgan adds: “U.S. Treasury bond buyers have been lining up, their demand on average 2.6x greater than supply. But the growing debt-to-GDP ratio of nearly 120% of GDP is troubling to most investors and economists. Solving the problem will be tricky.”
Eleanor Pringle
Source link -
HELOC rates today, November 17, 2025: Less likely to fall more this year if the Fed delays
The current national average HELOC rate hasn’t been this low all year, according to the analytics company Curinos. Home equity line of credit rates may not decrease significantly before the end of the year, as the Federal Reserve hints that another rate cut might not occur until 2026.
According to Curinos data, the average weekly HELOC rate is 7.64%. This rate is based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of 70%.
Homeowners have a huge amount of value tied up in their houses — more than $34 trillion at the end of 2024, according to the Federal Reserve. That’s the third-largest amount of home equity on record.
With mortgage rates lingering just over 6%, homeowners may not want to let go of their primary mortgage anytime soon, so selling the house may not be an option. Why give up your 5%, 4% — or even 3% mortgage?
Accessing some of the value locked into your house with a use-it-as-you-need-it HELOC can be an excellent alternative.
HELOC interest rates are different from primary mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which has moved down to 7.00%. If a lender added 0.75% as a margin, the HELOC would have a rate of 7.75%.
Lenders have flexibility with pricing on a second mortgage product, such as a HELOC or home equity loan, so it pays to shop around. Your rate will depend on your credit score, the amount of debt you carry, and the amount of your credit line compared to the value of your home.
And average national HELOC rates can include “introductory” rates that may only last for six months or one year. After that, your interest rate will become adjustable, likely beginning at a substantially higher rate.
You don’t have to give up your low-rate mortgage to access your home’s equity. Keep your primary mortgage and consider a second mortgage, such as a home equity line of credit.
The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to your credit line limit. Pull some out; pay it back. Repeat.
Meanwhile, you’re paying down your low-interest-rate primary mortgage like the wealth-building machine you are.
Today, FourLeaf Credit Union is offering a HELOC rate of 5.99% for 12 months on lines up to $500,000. That’s an introductory rate that will convert to a variable rate later. When shopping for lenders, be aware of both rates. And as always, compare fees, repayment terms, and the minimum draw amount. The draw is the amount of money a lender requires you to initially take from your equity.
The power of a HELOC is tapping only what you need and leaving some of your line of credit available for future needs. You don’t pay interest on what you don’t borrow.
Rates vary so much from one lender to the next that it’s hard to pin down a magic number. You may see rates from nearly 6% to as much as 18%. It really depends on your creditworthiness and how diligent a shopper you are.
For homeowners with low primary mortgage rates and a chunk of equity in their house, it’s probably one of the best times to get a HELOC. You don’t give up that great mortgage rate, and you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades. Of course, you can use a HELOC for fun things too, like a vacation — if you have the discipline to pay it off promptly. A vacation is likely not worth taking on long-term debt.
If you withdraw the full $50,000 from a home equity line of credit and pay a 7.50% interest rate, your monthly payment during the 10-year draw period would be about $313. That sounds good, but remember that the rate is usually variable, so it changes periodically, and your payments will increase during the 20-year repayment period. A HELOC essentially becomes a 30-year loan. HELOCs are best if you borrow and repay the balance within a much shorter period.
