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Port workers at East and Gulf Coast terminals steam toward a strike for the first time since 1977
U.S. ports along the East and Gulf Coasts are set to close on Tuesday, with the union representing tens of thousands of dockworkers and an industry group representing port operators and shipping companies at loggerheads over a new labor contract.
Experts warn that prolonged work stoppage could lead to higher costs on goods around the nation and create shortages ahead of the holiday shopping season. A one-week strike could cost the economy nearly $3.8 billion and increase the cost of consumer goods, according to the Conference Board, which called the situation a “political minefield” given that it comes just ahead of the November presidential election.
Other estimates of the potential economic hit also suggest the strike could take a toll, although the losses would likely amount to a small fraction of the nearly $29 trillion U.S. economy.
“A port strike could cost the U.S. economy billions of dollars a day, hurting American businesses, workers and consumers across the country,” Business Roundtable CEO Joshua Bolten said in a statement this weekend. “We urge both sides to come to an agreement before Monday night’s deadline.”
Such a breakthrough seemed unlikely as of late Monday afternoon.
The contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), which represents the ports and ocean carriers, expires at midnight Monday. A strike is set to officially kick off as of 12:01 Eastern Time on Tuesday, according to the ILA.
The two sides haven’t been at the bargaining table since June, and as of Monday afternoon there was little sign that they were set to resume talks.
A total of 14 ports involving some 25,000 workers could be affected by the strike, according to USMX: Baltimore; Boston; Charleston, South Carolina; Jacksonville, Florida; Miami; Houston; Mobile, Alabama; New Orleans; New York/New Jersey; Norfolk, Virginia; Philadelphia; Savannah, Georgia; Tampa, Florida; and Wilmington, Delaware.
The ILA is demanding sizable wage hikes and a complete ban on the use of automated cranes, gates and container-moving trucks in unloading or loading freight at ports handling about half of the country’s ship cargo.
“The ocean carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA longshore workers an unacceptable wage package that we reject,” the union said in a statement on Monday.
USMX did not immediately return a request for comment.
If a strike were deemed to threaten national health or safety, under the Taft-Hartley Act President Joe Biden could seek a court order requiring an 80-day cooling-off period. But Biden administration officials have repeatedly said he would not take to action to prevent a strike and that the contract dispute should be resolved through collective bargaining.
“Senior officials have been in touch with USMX representatives urging them to come to a fair agreement fairly and quickly — one that reflects the success of the companies. Senior officials have also been in touch with the ILA to deliver the same message,” White House spokesperson Robyn Patterson said.
With the first strike by the ILA at East and Gulf Coast cargo terminals since 1977 seemingly imminent, officials in New York and New Jersey have been working to minimize any potential supply-chain disruptions, setting up trucks to transport food and medical supplies.
Fuels like home heating oil and diesel gas are transported in ways that wouldn’t be impacted by a strike, New York Gov. Kathy Hochul said in a news conference on Monday, although she noted that the “potential for disruption is significant.”
New York does not expect shortages of essential goods anytime soon, so there’s no need to run to the grocery store and stockpile goods as occurred during the pandemic, Hochul said. Although there might be shortages of individual food items. such as bananas, should a strike persist longer than a few weeks, the state would continue to get food shipments from major markets including Canada, California and Mexico, as well as from New York itself, the governor added.
The automobile industry could feel a more immediate impact, however, with Hochul cautioning would-be buyers to call ahead.
“If you’re expecting a new car this week, it may be something you want to check with your dealer. It may not be arriving, for example, in the next few weeks,” she warned.
Israeli Prime Minister Benjamin Netanyahu on Tuesday dismissed his popular defense minister, Yoav Gallant, in a surprise announcement that came as the country is embroiled in wars on multiple fronts across the region.
Netanyahu and Gallant have repeatedly been at odds over the war in Gaza. But Netanyahu had avoided firing his rival. Netanyahu cited “significant gaps” and a “crisis of trust” between the men in his Tuesday evening announcement.
“In the midst of a war, more than ever, full trust is required between the prime minister and defense minister,” Netanyahu said. “Unfortunately, although in the first months of the campaign there was such trust and there was very fruitful work, during the last months this trust cracked between me and the defense minister.”
In the early days of the war, Israel’s leadership presented a unified front as it responded to Hamas’ Oct. 7, 2023, attack. But as the war dragged on and spread to Lebanon, key policy differences have emerged. While Netanyahu has called for continued military pressure on Hamas, Gallant had taken a more pragmatic approach, saying that military force has created the necessary conditions for a diplomatic deal that could bring home hostages held by the militant group.
ABIR SULTAN/POOL/AFP via Getty Images
Gallant, a former general who has gained public respect with a gruff, no-nonsense personality, said in a statement: “The security of the state of Israel always was, and will always remain, my life’s mission.”
Gallant has worn a simple, black buttoned shirt throughout the war in a sign of sorrow over the Oct. 7 attack and developed a strong relationship with his U.S. counterpart, Defense Secretary Lloyd Austin.
A previous attempt by Netanyahu to fire Gallant in March 2023 sparked widespread street protests against Netanyahu. He also flirted with the idea of dismissing Gallant over the summer but held off until Tuesday’s announcement.
Gallant will be replaced by Foreign Minister Israel Katz, a Netanyahu loyalist and veteran Cabinet minister who was a junior officer in the military. Gideon Saar, a former Netanyahu rival who recently rejoined the government, will take the foreign affairs post.
Netanyahu has a long history of neutralizing his rivals. In his statement, he claimed he had made “many attempts” to bridge the gaps with Gallant.
“But they kept getting wider. They also came to the knowledge of the public in an unacceptable way, and worse than that, they came to the knowledge of the enemy – our enemies enjoyed it and derived a lot of benefit from it,” he said
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Interest rates are on the decline. Or at least the federal funds rate is. That seems to be the confusing but somewhat accurate interpretation in recent weeks after the Federal Reserve issued its first cut to the federal funds rate in more than four years in September. Cut to a range between 4.75% to 5%, the expectation was that rates on borrowing products would soon ease. While mortgage rates did temporarily drop in the month, they rose again by close to a full percentage point in October. And credit card interest rates, admittedly influenced by a complex series of factors besides just the federal funds rate, just hit a record 23% last week.
Against this backdrop, then, prospective home equity borrowers may be wondering about the future of home equity loan interest rates. Specifically, what will happen to home equity loan rates after this week’s Fed rate cut? That’s what we’ll break down below.
See what home equity loan interest rate you qualify for here.
What will happen to home equity loan rates after this week’s Fed rate cut?
The average home equity loan interest rate is 8.35% right now. And while that could certainly fall if the Fed issues a 25 basis point cut to the federal funds rate as expected on Thursday, it’s unlikely that home equity loan rates will change dramatically once the meeting has concluded. Here are three reasons why:
Lenders may have already made adjustments: A Fed rate cut this week is essentially a certainty (the CME Group’s FedWatch tool has it pegged at over 99%). Understanding this, many lenders may have already priced this presumed cut into what they offer borrowers. Remember that mortgage rates, for example, actually hit a two-year low before the Fed formally issued a rate cut in September. Home equity loan lenders may have done the same thing here.
See what home equity loan rate offers are available now.
The Fed doesn’t directly dictate home equity loan rates: Can the Federal Reserve influence home equity loan rates? Sure. But they can’t and won’t directly dictate what lenders can offer borrowers. So even if there is a 25 basis point reduction this week, don’t expect home equity loan rates to fall by the same margin. If there’s a 50 basis point cut, however, then rates may fall more significantly.
Market conditions also play a role: The Fed’s actions (or lack thereof) are only one component in a series of factors that affect home equity loan interest rates. Economic growth considerations, like the unemployment rate and inflation, also play a major role in what lenders ultimately offer borrowers. And figures there have been mixed lately with unemployment in October poor while inflation continues to drop closer to the Fed’s preferred 2% target. With these additional factors moving in opposite directions, then, it may negate any additional significant reductions in home equity loan rates, at least temporarily.
The bottom line
Home equity loan rates, in theory, could fall after this week’s Fed rate cut. But that drop is unlikely to be significant and, for many borrowers, that cut may already be preemptively priced in with their current lender offers. Still, the rate climate is evolving and home equity loan rates are significantly cheaper than many alternatives. So it may still make sense to pursue this unique borrowing option now while looking for an opportunity to refinance your loan to a lower rate in the future.
Have more home equity loan questions? Learn more here.
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After an aggressive rate hike campaign in which Americans saw the federal funds rate rise from near zero to over 5%, the Federal Reserve is positioned this week to issue its second rate cut of the year. Following a 50 basis point cut in September, the federal funds rate dropped to a range between 4.75% to 5%. And after the Fed concludes its November meeting, that rate is widely expected to fall to a range between 4.50% to 4.75%. While a 25 basis point reduction will have a minimal effect on borrowers, it could cause many savers to reconsider their options, if they haven’t already.
In this climate, many savers may be pondering the benefits of opening a certificate of deposit (CD) account, specifically. Rates on these accounts surged in recent years alongside the federal funds rate, giving savers a safe and effective way to earn a significant return on their money. But now, with the second rate cut in three months set to be issued (and another likely for when the Fed meets again in December), some may be wondering if a CD is still worth opening. Below, we’ll break down three reasons why you should consider opening one now, even as the Fed continues to cut rates.
See how much more you could be earning on your money with a top CD here.
Why you should open a CD even as the Fed continues to cut rates
Not sure if it’s worth opening a CD in the face of looming rate cuts? Here are three reasons why it may still be worth doing right now:
Rates are still elevated (if slightly lower than what they were)
Sure, rates are falling. But they haven’t dropped so dramatically to render CD accounts useless. Remember, CD interest rates follow what the Fed does but they don’t mirror it directly. As such, you can still find a CD with a rate close to 5% right now. And additional cuts in the form of 25 basis points will have a small but gradual influence on the savings rate climate, meaning that it will take time for CD rates to significantly decline. Now is not yet that time.
Your money could use the extra layer of protection
With interest rate cuts being issued, unemployment data uneven, inflation falling and geopolitical tensions and concerns over the U.S. presidential election prominent, there are a variety of factors contributing to economic volatility right now. In circumstances like these, then, it’s beneficial to add an extra layer of protection for your money.
And a CD, with its fixed interest rate, can offer just that. Not only will you not need to worry about adverse market conditions affecting your CD account, you’ll also be able to budget with accuracy by knowing exactly how much interest you’ll earn upon account maturity.
Your window of opportunity is (slowly) closing
This may seem obvious but is worth reiterating. The window of opportunity to earn today’s elevated rate is closing. It’s important to remember that CD rates were under 1% just a few years ago. And while no one is predicting that rates will fall that low anytime soon, as noted above, they are on a downward path.
It doesn’t make sense, then, to wait for rates to fall further, particularly if you have a sum of money that you can comfortably afford to deposit into a CD right now. Just remember to only deposit an amount that you can leave in the account until maturity or you’ll risk having to pay a costly early withdrawal penalty to regain access.
The bottom line
CD account rates are on the decline, but not so dramatically or so rapidly that savers can’t still earn a major return on their money right now. But with another rate cut likely in just days and additional ones possible for December and into 2025, savers should act promptly before this window of opportunity fully closes. It took years, after all, for these CD rates to rise as high as they currently are. It makes sense, then, to open one while you still can.
