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3 home equity moves to make before the June Fed meeting (and 2 to avoid)
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The Federal Reserve’s next meeting – and their announcement on the future of interest rates – is just days away. Set for June 11 and June 12, the Fed uses these meetings as a venue to discuss monetary policy, the state of the economy and adjustments it believes need to be made in order to help the economy thrive.
That means the federal funds rate could change next week. And because that’s what many financial institutions base their rates on, it could mean changes for borrowers. So, if you’ve thought about tapping into your home equity, there are a few moves you should make before the June Fed meeting. Find those moves below.
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3 home equity moves to make before the June Fed meeting (and 2 to avoid)
With the June Fed meeting fast approaching there are a few wise moves you can make with your home equity – and some mistakes to avoid:
Lock in your rate now
The federal funds rate, the benchmark that typically forms the basis for consumer interest rates, is at the center of Fed meeting discussions. That’s because increases to this rate are the Fed’s most effective way to dampen inflation. And, since inflation is still well above the Fed’s 2% target, there’s a possibility that it could increase the federal funds rate at its next meeting.
Of course, if the Fed increases its rate, home equity rates could rise. So, if you’re thinking about tapping into your equity, it’s a wise idea to lock in your rate with a home equity loan now, before the cost potentially rises.
Lock in your home equity loan rate before it’s too late.
Use your equity to pay off debt
If you have high interest revolving debt, now may be a good time to think about using your home equity to pay it off. With the federal funds rate already sitting at a 23-year high, you may have realized higher minimum payments than you’re used to paying. And, if the Fed raises rates again during its June meeting, payments on revolving debt may rise further.
But, you don’t have to let that happen. You could use your home equity to pay off your high interest revolving debts now – before the Fed meeting.
Limit your borrowing to what you need
The average American homeowner has about $206,000 in tappable equity, according to the May ICE Mortgage Monitor report. But, that doesn’t mean you should tap into all the equity available to you. Instead, limit your borrowing to what you need.
“Leveraging too much of one’s home equity can create issues down the road such as poor debt to income or debt to equity ratios,” explains Dan Simon, CLU, retirement planning advisor at the financial planning firm, Daniel A. White & Associates. And, that can make it difficult to borrow money at reasonable rates in the future.
But, that’s not the most important reason to limit your home equity borrowing. “The biggest cause for concern is that if a homeowner overextends themselves by borrowing against their equity, and defaults,” they could end up losing their home, says Simon. “Like most things in life, leveraging the equity in one’s home should be used in moderation with the intention of paying off debt.”
As inflation persists and the cost of living rises, you need to keep your controllable expenses to a minimum. And, tapping into more equity than you need can lead to a higher home equity borrowing expense than you want.
2 home equity moves to avoid
While there are a few smart home equity moves you should make before the June Fed meeting, there are a couple of moves that may prove to be a mistake:
Opening a HELOC
Home equity lines of credit (HELOCs) are variable-rate credit lines that are backed by your home. And, opening one ahead of the June Fed meeting could be a mistake.
“Interest rates on lines of credit are variable and can increase at any time,” explains Saundra Curry, co-founder and CEO of the financial education company, BC Holdings of TN. So if the Fed may increase its federal funds rate, HELOC rates may rise.
But, that’s not the only reason a HELOC may be a bad idea. “If you borrow more than 30% of the credit line, it can lower your credit score,” says Curry. And, “the credit line can impact your debt-to-income for the long-term even if you have a zero balance.”
Not shopping around for lenders
Sure, most lenders will offer approximate rates as one another. But approximate isn’t identical and every percentage point – or quarter of a percentage point – you can save will add up over time, particularly when borrowing tens of thousands of dollars. So be sure to shop around for lenders to find the best rates and terms for your situation. It may lead to significant savings.
Tap into the equity you need today.
The bottom line
Your home equity could put the money you need at your fingertips. But, you need to make wise moves when you tap into it. And, with the Fed meeting happening next week, you may want to lock in your rate now, use your equity to pay off high interest revolving debts and limit your borrowing. Also, avoid a HELOC as your payments may rise if you choose this option. Compare leading home equity loans now.
President Biden is in Arizona on Friday to issue a formal presidential apology to Native American communities for the atrocities committed against Indigenous people during a 150-year era of forced federal Indian boarding schools. The president’s remarks are scheduled for 1:30 p.m. EDT.
The president chose to speak at the Gila River Indian Community in Arizona, although his apology is for all tribal communities that suffered. From 1819 through the 1970s, the federal government and religious institutions established boarding schools throughout the country to assimilate Alaska Native, American Indian and Native Hawaiian children into White American culture by forcibly removing them from their families, communities and belief systems. Many children who attended these boarding schools endured emotional and physical abuse, and hundreds of them died.
“I’m heading to do something that should have been done a long time ago,” Mr. Biden told reporters before boarding Marine One on Thursday afternoon. “Make a formal apology to the Indian nations for the way we treated their children for so many years.”
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The Department of the Interior, run by the first Native American Cabinet secretary, Deb Haaland, conducted the first-ever federal investigation into the Indian federal boarding school era. It revealed that more than 500 American Indian, Alaska Native and Native Hawaiian children’s deaths occurred at 19 of the federal Indian boarding schools, and identified 53 marked and unmarked burial sites at school sites nationwide. The federal government often contracted with Presbyterian, Catholic and Episcopalian religious institutions to run the schools.
The report found that when children failed to meet standards or broke rules, they were subjected to corporal punishment, including “solitary confinement; flogging; withholding food; whipping; slapping; and cuffing.” Oftentimes, older children were forced to inflict punishment on their younger classmates.
Speaking with reporters aboard Air Force One en route to Arizona on Thursday, Haaland’s voice broke.
“For more than a century, tens of thousands of Indigenous children, as young as 4 years old, were taken from their families and communities and forced into boarding schools run by the U.S. government and religious institutions,” Haaland said. “This includes my own family. For decades, this terrible chapter was hidden from our history books. But now, our administration’s work will ensure that no one will ever forget.”
How to watch President Biden’s remarks at the Gila River Indian Community
- What: President Biden delivers an apology on behalf of the country for atrocities at federal Indian boarding schools.
- Date: Friday, Oct. 25, 2024
- Time: 1:30 p.m. EDT
- Location: Gila River Indian Community in Arizona
- Online stream: Live on CBS News in the player above and on your mobile or streaming device.
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If you’ve paid any attention to the precious metals market recently, you’re likely aware that gold has been on an impressive upward trajectory since the start of the year. On January 1, gold was trading at $2,063.73 per ounce. Fast forward to today (October 25, 2024), and the price of gold is sitting at $2,734.46 per ounce. This represents an increase of $670.73 per ounce, amounting to a growth rate of approximately 33% in a little over 10 months. This significant growth has captured the attention of investors and market analysts worldwide, as gold’s performance defies predictions and underscores its historic role as a stable store of value.
The recent rally becomes even more noteworthy when compared to gold’s prior record highs. Just this August, the price reached $2,525 per ounce — a milestone that marked a new peak at the time. However, gold’s price was far from plateauing at that point. The price of gold continued to surge, eventually surpassing that mark by over $200 per ounce. This upward movement has established the past year as a standout year for gold, drawing investors who may have initially seen these peaks as ceiling prices, but who now view gold’s price potential as far more expansive than anticipated.
But while there’s no question that gold has offered some of the biggest returns over the past year, many investors are questioning what, precisely, is driving this sustained surge. So why is the price of gold so high right now? That’s what we’ll break down below.
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Why is the price of gold so high right now?
Here are a few of the factors that have been pushing gold’s price to new heights over the last year.
Central banks are buying in
A primary force behind gold’s recent bull run is the purchasing activity of central banks worldwide. Central banks, particularly those in emerging economies, are increasing their gold reserves as a hedge against economic uncertainty and to diversify their holdings away from traditional fiat currencies. This sustained buying pressure from such powerful market participants has created a strong foundation for price appreciation and signals a broader shift in institutional attitudes toward gold as a strategic asset.
Investors are capitalizing on short-term gains
In addition to central banks, individual investors have been flocking to gold, seeing an opportunity for both short-term and long-term gains. With gold prices rising so quickly, gold has become an attractive asset for speculative trading as well as a safer, longer-term investment. So, some investors are now seeking quick returns by betting on the momentum of gold’s climb to earn rapid profits, while others continue to rely on gold’s stability.
The rush of buying and trading activity creates a feedback loop, further driving demand and prices up. This blend of trading activity has been a core factor in the consistent upward price movement over the past year, illustrating gold’s dual role as both a stable store of value and a source of near-term market excitement.
Find out more about your gold investing options here.
More investors are diversifying
Ongoing geopolitical tensions, including election year uncertainties, are also playing into gold’s price surge. Elections can influence market sentiment by adding uncertainty, often triggering interest in safe-haven assets like gold. Additionally, global economic slowdowns and international conflicts, such as those involving energy trade disputes, have introduced more volatility in the global market, leading investors to seek refuge in gold.
With each spike in uncertainty, gold’s appeal as a safe, non-correlated asset increases, attracting investors looking to hedge against potential market downturns. For many, gold remains a reliable safeguard, reinforcing its role as a cornerstone in diversified portfolios, especially during periods of unpredictability.
The limited supply also plays a role
The limited supply of gold has also contributed to its recent price surge. Gold is a finite resource, after all, and mining new gold is both costly and time-intensive. As demand grows from both investors and industrial sectors, the pressure on gold’s limited supply intensifies, elevating its value.
Technological advancements in sectors like electronics and green energy have also increased gold’s utility. Gold is used in electronic components, medical devices and emerging green technologies, creating steady industrial demand. This expanding industrial application is a lesser-known but increasingly important factor, reinforcing gold’s value beyond traditional uses.
The bottom line
The remarkable ascent of gold prices in 2024 can be attributed to a perfect storm of global economic and political factors. Central banks’ substantial purchases, investors’ pursuit of both security and short-term gains, geopolitical uncertainties and the finite nature of gold itself have converged to create a robust and sustained rally.
Looking ahead, many analysts believe that gold’s trajectory may continue upward, especially if central banks and industrial sectors sustain their interest and if global uncertainties persist. While the current price surge may eventually stabilize, investors and analysts alike are continuing to keep a close eye on this precious metal right now, as gold continues to set new records and play a vital role in today’s dynamic economic landscape.
At 56, Kim Hale is reigniting her passion for dance, sharing her journey on social media and embracing the motto, “Dreams have no deadlines,” as she pursues a role on Broadway.
Hale, who has over 13 million likes on TikTok, said she has always loved the stage and the energy that New York City brings,
“It just feels like a city where you can dream big,” said Hale.
Hale’s dream of performing on Broadway began in her early years, driven by her passion for expressing herself through movement. She pursued that ambition into her 20s and 30s, but eventually left New York, finding the constant rejection difficult to handle. Reflecting on that time, she acknowledges that she was more vulnerable then. Relocating to California, Hale remained connected to dance, teaching and working for renowned dancer and actor Debbie Allen.
“The biggest gift I got was working for Debbie Allen, and being able to be in her world, which taught me that you can take the skills of dance and apply them to anything,” said Hale.
Hale was around dance, but she wasn’t dancing, and it turns out, that is what her heart still wanted.
“It took COVID. It took the loss of both of my parents. It took skin cancer to get me to step back into a dance studio,” said Hale.
With encouragement from a friend, Hale enrolled in a hip-hop class and “ended up loving it,” saying that each class helped her reconnect with herself.
Hale began sharing her journey on social media, where her posts took off. Broadway choreographer Jerry Mitchell commented on one of her videos, telling her, “Dreams have no deadlines.” It’s a mantra she holds close.
“I just held onto that,” she said.
In May, Hale got to perform in a special showing of “Chicago,” though she doesn’t see it as her official Broadway debut.
“I want to audition and book a show because I prepared for it. I was ready when opportunity met preparation, and I got it,” she said.
For Hale, her return to New York and pursuit of a Broadway role is about more than just achieving a dream.
“The goal is to see what I’m capable of,” she said. “You have to do the work. You have to be ready. But I believe that if it’s meant for me, it will happen. And if it’s not, maybe there’s something bigger out there.”
