Latest news with #federalreserve
Bloomberg
4 days ago
- Business
- Bloomberg
Bessent Says US Will Never Default as Congress Faces Endgame
Treasury Secretary Scott Bessent said the US 'is never going to default' as the deadline for increasing the federal debt ceiling gets closer. 'That is never going to happen,' Bessent said Sunday in an interview with CBS's Face the Nation. 'We are on the warning track and we will never hit the wall.'
CBS News
22-05-2025
- Business
- CBS News
Home equity loan rates hit 2025 low: Why you should take advantage now
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Home equity loan interest rates declined to their lowest point so far in 2025 this week. Getty Images Home equity loan interest rates, already on a slow but consistent decline for much of the last 18 months, fell to a new 2025 low this week. Now at an average of just 8.23%, home equity loan rates are falling again, according to Bankrate data. The recent decline marked a 13 basis point drop from May 14, and it continued the trend of home equity loan rates declining after they started 2024 close to 9%. This new decline, however, is a particularly important one as it comes amid a pause in the federal funds rate, which hasn't been reduced since December 2024. And it emphasizes the cost-effectiveness of this borrowing tool right now, as rates here are materially lower than those available with personal loans (over 12%) and credit cards (over 22%). As borrowers have experienced in recent years, however, the interest rate climate can be volatile. So with home equity loan rates hitting a new 2025 low, it could make sense to take advantage of this timely opportunity while readily available. Below, we'll detail three reasons why it makes sense to take action now. Start by seeing how low a home equity loan rate you'd be eligible for here. Why you should take advantage of a low home equity loan rate now Here are three timely reasons why you should consider locking a home equity loan rate now: Home equity loan rates are fixed As noted above, it's been a bumpy ride down to this low of a home equity loan rate, and there's no telling when rates will go lower, or even if they will. Fortunately, a home equity loan comes with a fixed rate that will remain the same for borrowers even if the interest rate climate reverses course in the weeks or months ahead. Considering that rates here are lower than most alternatives, then, it makes sense to secure this affordability while you can. And, if rates decline in a significant way in the future, you could always refinance your home equity loan at that point. In the interim, however, you'll be protected against any future rate hikes ahead. Get started with a home equity loan online today. HELOC rates have been increasing For much of 2025, a home equity line of credit (HELOC) was the more affordable option when measured against a home equity loan. While home equity loan rates remained relatively unchanged, HELOC rates continued to fall and, at one point, were more than two full percentage points below their September 2024 average. But that window of opportunity has since passed. HELOC rates have been steadily climbing in recent weeks and are now virtually the same as a home equity loan at an average of 8.20%. Unlike home equity loans, however, HELOCs have variable rates that adjust monthly, meaning that they could rise even higher should trends continue as they have so far in May. In this climate, then, a home equity loan may be the better option. Your financing needs may not be able to wait Waiting for an ideal interest rate scenario isn't realistic for many homeowners right now, and it's arguably not necessary when home equity loan rates are as low as they are currently. Your financing needs, meantime, may not be able to wait for the interest rate climate to cool any further, particularly if you're planning to use your home equity to consolidate high-rate debt, like that accumulated with credit cards, for example. Considering that credit card rates are almost three times higher than home equity loan rates, it makes sense to use the latter to pay off the former now – and not delay and damage your financial standing any further. The bottom line With home equity loan interest rates at a new low for 2025, homeowners in need of additional financing may want to take advantage of this opportunity now. Considering that this low rate will be fixed, that alternatives like HELOCs are actually becoming more expensive and the urgent financing needs that a home equity loan can help cover, many would benefit by shopping around for lenders and rates now. Just be sure to calculate your repayment costs with precision as your home functions as collateral in this scenario and it could be foreclosed on if you're ultimately unable to repay all that was withdrawn. Learn more about your current home equity loan options here.
Forbes
07-05-2025
- Business
- Forbes
Fed Officials Fail To Cut Rates After U.S. Economy Contracts In Q1
Fed officials left the benchmark funds rate intact today. (Photo by) Getty Images Federal Reserve officials left the highly visible benchmark federal funds rate unchanged during this month's policy meeting even after government data showed the U.S. economy contracted during the first quarter. The feds fund rate, which has significant implications for broader borrowing costs, has generated countless headlines since Federal Open Market Committee members started hiking it in 2022. Further, it could have significant implications for risk assets, for example stocks and many cryptocurrencies like bitcoin, which do not pay yields like fixed-income securities. After boosting rates several times, the target range for the fed funds rate reached 525 to 550 basis points in 2023, its highest level in more than 20 years. Since then, FOMC officials have reined in the fed funds rate, decreasing it to a range of 425 to 450 basis points in December 2024 and leaving it unchanged since then. These government officials spoke to recent economic developments this afternoon, specifying in a statement that 'Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace.' 'The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid,' the officials continued. 'Inflation remains somewhat elevated.' They offered this guidance after government data provided by the U.S. Bureau of Economic Analysis indicated that the nation's real GDP shrank 0.3% during the first three months of 2025. The U.S. economy grew 2.4% in the final three months of 2024, so the outcome of the latest BEA report did not signify the start of a recession. The fed funds rate has generated significant visibility because of the implications it has for a wide range of lending rates, including those tied to mortgages, credit cards and auto loans. It can also impact investment behavior by bolstering yields and therefore giving market participants additional incentive to seek fixed-income securities, for example bonds, that make regular payments to their owners. This makes risk assets, for example cryptocurrencies like bitcoin that do not make such payments, less attractive in comparison, potentially sapping demand and placing downward pressure on their prices.
