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With trillions in tax breaks scheduled to expire after 2025, lawmakers are debating policy priorities that could impact millions of families and small businesses.
“This will be a make-or-break moment for the federal budget and for America’s middle class,” Senate Finance Committee Chairman Ron Wyden, D-Ore., said on Thursday.
However, negotiations could be difficult amid growing concerns about the federal budget deficit, experts say.

Senate Finance Committee Chairman Ron Wyden, D-Ore., questions IRS Commissioner Charles Rettig at a Senate Finance Committee hearing.
Tom Williams | Pool | Reuters

With trillions in tax breaks scheduled to expire after 2025, lawmakers are debating policy priorities that could impact millions of families and small businesses.
Enacted by former President Donald Trump in 2017, the Tax Cuts and Jobs Act, or TCJA, made sweeping tax changes, including temporary provisions that will sunset after 2025 without action from Congress.

The law also permanently reduced the top corporate tax rate to 21%.
Some of the expiring TCJA provisions include lower federal income tax brackets, bigger standard deductions, a more generous child tax credit, higher gift and estate tax exemptions and a 20% tax break for pass-through businesses, among others.
“This will be a make-or-break moment for the federal budget and for America’s middle class,” Senate Finance Committee Chairman Ron Wyden, D-Ore., said in a prepared statement at a Senate hearing on Thursday.
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If temporary TCJA provisions expire after 2025, more than 60% of tax filers could face increased taxes, according to estimates from the Tax Foundation.

But with future control of the White House and Congress uncertain, it’s hard to predict which provisions, if any, will be extended among competing priorities.
In the meantime, lawmakers and organizations are voicing support for certain tax issues before the 2025 deadline.

Small business tax break is ‘crucial’

Many small businesses worry about the so-called qualified business income deduction, or QBI, which is worth up to 20% of eligible revenue, subject to limitations.
The temporary TCJA tax break applies to pass-through businesses, which report income at the individual level. Those may include sole proprietors, partnerships and S-corporations, along with some trusts and estates. 

Jeff Brabant, vice president of federal government relations for the National Federation of Independent Business, which represents about 300,000 small and independent businesses, stressed the importance of making the QBI deduction permanent.
“The creation of the 20% small business deduction has been crucial to the survival of small business owners,” he said at the Senate hearing on Thursday. 
“Since its passage, the small business economy has endured many issues, including a pandemic that closed many businesses for long periods, record inflation and a historically tight labor market,” he added.

Debate over the child tax credit

Another witness, Indivar Dutta-Gupta, a visiting fellow at Georgetown University and tax fellow at Roosevelt Institute, argued for the child tax credit expansion.   
“The child tax credit is one of the single most important ways that we can improve working families after-tax income,” Dutta-Gupta told Senate lawmakers on Thursday.
The American Rescue Plan in 2021 boosted the maximum child tax credit to $3,000 or $3,600 per child, up from $2,000, and sent monthly payments to families.
As a result, the child poverty rate fell to a historic low of 5.2% in 2021, largely due to the expansion, according to a Columbia University analysis. 
After pandemic relief expired, childhood poverty more than doubled in 2022, jumping to 12.4%, and then increased to 13.7% in 2023, the U.S. Census Bureau reported.

Concerns over the federal budget deficit

While lawmakers have outlined several priorities before TCJA extensions, negotiations will be difficult amid growing concerns over the federal budget deficit, experts say.
The federal government has already spent more than $1 trillion on interest for its $35.3 trillion national debt this year, the U.S. Department of the Treasury reported Thursday.
“The house is burning down and we’re arguing over the furniture,” Kent Smetters, a professor of business economics and public policy at the University of Pennsylvania’s Wharton School, told CNBC. More

Individuals who have pension income may see their Social Security benefits reduced.
Some Washington lawmakers are pushing to change that.
But experts say simply eliminating the rules — formally known as the government pension offset, or GPO, and windfall elimination provision, or WEP — may not make the program’s benefits fairer.

Skynesher | E+ | Getty Images

Rare bipartisan momentum is growing in the House of Representatives to force a vote on a bill that would address a topic Congress typically avoids — Social Security.
The bill — the Social Security Fairness Act — would repeal two rules that reduce Social Security benefits for workers and spouses, widows and widowers who also receive pension income.

On Tuesday, Reps. Abigail Spanberger, D-Va., and Garret Graves, R-La., filed a discharge petition to force a vote on the bill on the House floor.
The petition currently has 172 signatures out of the 218 signatures required for a vote, including 25 Republicans, according to Spanberger’s office.
If brought to the House floor, the Social Security Fairness Act may pass, based on the 327 co-sponsors who are currently behind the proposal.
The Senate version of the bill, with 62 co-sponsors, also has broad support.
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National groups representing police, firefighters, teachers, postal workers and government employees on the federal, state, county and municipal level, have also backed the effort.
Despite the momentum, experts say pushing the bill into law will not be easy.
“There’s just a time constraint here, and both the Senate and the House have a lot of work to do before the end of the year,” said Emerson Sprick, associate director for the economic policy program at the Bipartisan Policy Center.
Moreover, simply eliminating the rules — formally known as the government pension offset, or GPO, and windfall elimination provision, or WEP — may not make the program’s benefits fairer, he said.
The WEP, in particular, is “deeply, incredibly misunderstood,” which contributes to calls to simply get rid of the rule, Sprick said.

How the WEP and GPO work

The windfall elimination provision reduces Social Security benefits for individuals who receive pension or disability benefits from employment that did not require them to contribute payroll taxes to the program.
More than 2 million workers are affected by the WEP, according to the legislative proposal.
The government pension offset reduces Social Security benefits for spouses, widows and widowers who also have pension income.
More than 745,000 Americans are affected by the GPO.

The reduced income can come as a shock to those who are affected — and can prompt those individuals to make difficult life decisions.
At a Wednesday Senate hearing, Roger Boudreau, president of the Rhode Island American Federation of Teachers Retirees Chapter, cited a 75-year-old schoolteacher who is still working for fear she would not have enough income to live on if she retires.
She currently receives Social Security benefits after her husband predeceased her. But if she retirees and begins collecting the pension benefits she earned, that Social Security income may disappear. Her pension benefits wouldn’t be enough to live on, Boudreau said.
“She is basically a slave to her job as a result of the government pension offset,” Boudreau said.

Why eliminating current rules may be problematic

But nixing the WEP and GPO completely could make benefits disproportionately generous to workers who only pay Social Security taxes for some of their careers, research from the Center on Budget and Policy Priorities has found.
Social Security benefits are progressive, which means the income replacement formula is more generous for low earners than for higher earners.
Consequently, pension-covered workers who have contributed fewer years to Social Security may look like low earners to the program. That can result in more generous benefits for those workers compared others who have spent their entire careers contributing to the program.
Both the WEP and GPO rules are designed to adjust benefits so people with a combination of covered and non-covered Social Security work don’t get treated more generously, said Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities.
As a long-time federal employee who is now retired, Van de Water is personally affected by the windfall elimination provision.
“These bills would benefit me, but I still think they’re a bad idea,” Van de Water said.

Eliminating the rules through the Social Security Fairness Act would also cost the program at a time when Social Security faces looming trust fund depletion dates, he said.
The Congressional Budget Office has estimated the repeal would cost around $196 billion over 10 years.
Updating the current rules would be a better way to go, according to the Center on Budget and Policy Priorities. That could include a new income replacement rate that better reflects total income, including for spousal and survivor benefits.
The Bipartisan Policy Center has advocated for updating Social Security’s benefit formula to prorate benefits based on the share of an individual’s lifetime earnings that contributed to the program.
“The solution here certainly isn’t to repeal it,” Sprick said of the windfall elimination provision. “It’s to change it, it’s to make it clear, it’s to make it based on the most updated data that [the Social Security Administration] has access to.”
Nevertheless, lawmakers plan to continue to fight for elimination of the current rules through the Social Security Fairness Act.
“Get a hold of your representative or your senator to get on it, because this is part of a broken system,” Sen. Mike Braun, R-Ind., a Republican co-sponsor of the bill, said at this week’s Social Security hearing. “It’s an inequity that needs to be fixed.” More

Some workers believe they are either ahead or on time in terms of their retirement plans, according to a recent survey by CNBC.
Home equity or ownership contributes to the feeling of readiness.
But that confidence might be misplaced, according to Angie Chen, a senior research economist and the assistant director of savings research at the Center for Retirement Research at Boston College. 

Rgstudio | E+ | Getty Images

Owning a home makes some people feel more confident about their prospects for retirement — but that may be misguided, some experts say.
About 37% of polled workers — including those with part- or full-time jobs, or who are self-employed or business owners — say they are “ahead of schedule” (7%) or “on schedule” (30%) in their retirement savings, according to the Your Money Retirement Survey conducted by SurveyMonkey and CNBC.com.

Of those who said they were ahead or on schedule, 42% say an early start in retirement savings helped them get ahead. Other factors that contributed to their readiness included having little to no debt (38%) and home equity or ownership (37%), the report found.
The survey polled 6,657 adults, including 2,603 retired adults and 4,054 adult workers, in August.
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But homeowners’ confidence about the wealth in their home value might be misplaced, according to Angie Chen, a senior research economist and the assistant director of savings research at the Center for Retirement Research at Boston College. 
“Homeowners are actually more likely to be overconfident in their retirement readiness,” Chen said. “There’s a lot of misconception in terms of how people assess whether they are ahead or not in retirement.”

Still, owning a home can help bring other benefits in retirement years, said Winnie Sun, co-founder and managing director of Sun Group Wealth Partners in Irvine, California.
Here’s what to know.

‘Overconfident or not worried enough’

The Center for Retirement Research’s National Retirement Risk Index measures the share of working-age households at risk of being financially unprepared for retirement. When comparing individual household assessments with the NRRI in 2023, a CRR analysis found 28% are “not worried enough” — meaning they think they are not at risk, while the index predicts they are.
“People who own houses but still owe a lot on their houses are much more likely to be overconfident or not worried enough,” said Chen. 
In order to better assess retirement readiness, “it’s important to not just consider the value of your home, but also how much you borrowed,” said Chen, and how much you still owe.

For example: If you bought a $500,000 house, but still owe $400,000 on it, your equity is really $100,000, she said. Tapping that equity isn’t always cheap, and there can be risks to borrowing against your home, experts say.
“Housing is not really liquid,” Chen said. “You might feel good about having this large asset, but you can’t consume that in retirement. You can’t spend it in a way that you can spend and consume other types of savings.” 
On the other hand, owning a home can have certain upsides, according to experts.

‘You have a controlled cost of housing’

Whether you’re factoring home equity into retirement readiness or not, owning a home can have other financial benefits in retirement.
“Homeownership is sort of twofold,” said Sun, who is a member of CNBC’s Financial Advisor Council. 
For one, you’re building equity. When you sell the property — say if you downsize once you’re retired — you can access that money as a lump sum, Sun explained.
Plus, while you own the property “you have a controlled cost of housing” that may include a set mortgage payment, Sun said.
While homeownership costs such as home insurance and property taxes have increased in recent years, you may qualify for senior pricing on utilities by the time you’re retired, said Sun.

“A lot of my clients, as they get older, they also qualify for senior pricing on their utilities,” said Sun. “So some of their costs could come down as they get older.”
While a house is not liquid, you may be able to tap into your home equity if you need to, experts say.
“In most cases for retirees, they kind of see equity as their emergency fund,” Sun said. More

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 4, 2024. 
Brendan Mcdermid | Reuters

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Here’s what CNBC TV’s producers were watching as the major averages made a stunning comeback from the day’s lows and what’s on the radar for the next session.

The big stock story of the day

Nvidia shares swung by about $10 from the session lows to the day’s high. The stock ended the day higher by 8%.
The stock jumped as CEO Jensen Huang spoke at the Communacopia conference saying Nvidia’s key Blackwell chip is in full demand and fears of a slowdown or production problems aren’t a concern. Investors reacted to his optimism.
The stock is still 17% from the June 20 high, but it’s up 136% so far in 2024.
The S&P tech sector was up 3.25% on Wednesday. It is 8% from the 52-week high.

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Nvidia’s year-to-date performance

The sectors

CNBC’s Mike Santoli, who always does a great job of explaining the market, made some great points. We’ll be following up on them Thursday.
He explained that Wednesday’s roughly 154-point turnaround for the S&P 500 — from the morning’s low to the high of the day near the end of the session — had to do with rising bond yields. The Dow swung about 910 points from its low to the day’s high, while the Nasdaq Composite saw a roughly 633-point jump.
Recently as yields have gone up, stocks have fallen. 
Because bond yields have retreated so quickly in the last few months, investors have grown nervous that they were dropping due to fears about the economy. In turn, this hurt confidence in stocks. 
Wednesday’s rise in yields, which also began in the late morning, as Santoli explained, gave a new boost of confidence to stock investors. 
The sectors that have done best in the last three months are rate-sensitive — for instance, real estate is up 18% in three months — as investors look for yield in the face of falling rates.
Utilities are up about 10% in three months.
Financials are up 8.6% in three months.
Energy and communication services are the weakest S&P sectors in the last three months, respectively down 6% and 5%.

Insurers

We’ll dive back into the insurance sector after Wednesday’s drop. CNBC TV’s Contessa Brewer covers the beat. She noted the fall for Travelers, down 3.16%, and Hartford Financial, down 2.4%. W.R. Berkley dropped 2.36%, and Aon fell 1.8%. 
Brewer’s sources say it may have to do with investor concern that an election win by Vice President Kamala Harris would lead to more litigation and fewer protections for businesses. This is a big issue for insurers across the country right now. Some investors are also worried that a Harris victory would lead to less consolidation in the industry.
The sector has been strong in the last three months.
Progressive is up about 20% in that time.
Aon up 17.4% in three months.
Hanover Insurance up 15.4%.
Arthur J. Gallagher up 15% in three months.
Hartford Financial up 14.7% in three months.
Willis Towers Watson is up 12% in three months. 

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Progressive shares over the past three months

Cocoa

Jill Schneider on the CNBC desk was watching the cocoa trade Wednesday.
The commodity was up more than 6% Wednesday. It is up 12% in a week.
Regulators in Ghana and Ivory Coast are talking with cocoa farmers about raising what the countries pay farmers for their crops.
Shares of Hershey fell more than 2% Wednesday.

Boeing

CNBC TV’s Phil LeBeau will be watching and waiting as 33,000 union members vote on a contract deal.
Boeing is 40% from the Dec. 21 high.
The stock is down 7% so far in September.

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Boeing’s 2024 performance

Solar stocks

There was a big move for the sector Wednesday as First Solar picked up 15%. The stock is 22% from the June high.
One reason was investors who back the industry think Vice President Harris put herself in a better position to win the election with her debate performance Tuesday evening. This set up a positive atmosphere for green energy, including solar.
Canadian Solar was up about 12% Wednesday. Shares are 51% from their high nearly a year ago.
Sunrun was up 11.3%. The stock is 14% from the Aug. 26 high.
SolarEdge was up 8.5% Wednesday. It’s still 87% from its high about a year ago.
The Invesco Solar ETF (TAN) rose 6.3%. It is 29% lower from the high it reached last September.

Kroger reports before the bell

The supermarket operator releases earnings Thursday morning.
Kroger is flat since last reporting three months ago.
CEO Rodney McMullen recently testified that the proposed merger with Albertsons would bring large savings to customers. The Federal Trade Commission is suing to block the deal, saying it would decrease competition and be bad for consumers. More

The consumer price index rose 2.5% in August 2024, on an annual basis, the Bureau of Labor Statistics said.
That CPI inflation reading is the lowest since February 2021.
Inflation has gradually declined, but a few categories, such as housing, remain stubbornly high.
The Federal Reserve is expected to start cutting interest rates, since inflation has moderated.

Grace Cary | Moment | Getty Images

Inflation continued to throttle back in August, signaling that the fast-rising prices that plagued the U.S. economy for the better part of three years during the pandemic era are increasingly moving into the rearview mirror.
Overall inflationary pressures are “dissipating,” said Sarah House, senior economist at Wells Fargo Economics.

The consumer price index — which measures how fast prices are changing across the U.S. economy — rose 2.5% in August from a year ago, the U.S. Department of Labor reported Wednesday.
That figure is down from 2.9% in July and is the lowest reading since February 2021.

There are still some pockets of potential concern, however, with housing perhaps the most troubling among them, economists said. But prices for staples such as groceries and gasoline have normalized and the inflationary trend appears firmly to the downside, they said.
“We’d expect inflation to continue to subside,” though with “some ups and downs” in the data from month to month, House said.

‘Tamed’ but not ‘vanquished’

The August inflation reading is down significantly from the 9.1% pandemic-era peak in mid-2022, which was the highest level since 1981.

It’s also nearing policymakers’ long-term target of around 2%.
“Overall, inflation appears to have been successfully tamed but, with housing inflation still refusing to moderate as quickly as hoped, it hasn’t been completely vanquished,” Paul Ashworth, chief North America economist at Capital Economics, wrote in a note Wednesday morning.

With that in mind, the U.S. Federal Reserve is expected to start cutting interest rates this month as its focus shifts from tackling inflation to averting recession in the face of a cooling job market.
The central bank raised rates to their highest level in 23 years during the pandemic era, pushing up borrowing costs for consumers and businesses in a bid to tame inflation.
Both House and Ashworth expect the Fed to cut rates by a quarter of a percentage point at its upcoming policy meeting next week.

Housing inflation is falling but still high

Inflation for physical goods spiked as the U.S. economy reopened in 2021.
The Covid-19 pandemic disrupted supply chains, while Americans spent more on their homes and less on services such as dining out and entertainment. Supply shortages coincided with higher consumer demand.
Services inflation — which is generally more sensitive to labor costs — also jumped, partly influenced by a historically hot labor market as employers clamored for workers when the economy reopened, economists said.
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Housing, which is counted in the “services” category, has been a big impediment to overall inflation falling to the Fed’s target, economists said.
Shelter is the largest component of the CPI and therefore has an outsized effect on inflation readings.
The shelter index has risen 5.2% since August 2023, accounting for more than 70% of the annual increase in the “core” CPI, the Bureau of Labor Statistic, or BLS, said Wednesday. The core CPI is economists’ preferred gauge of inflation trends; it strips out food and energy costs, which can be volatile.

Housing inflation moves up and down at glacial speed due to how the government measures it, economists said.
Such data quirks mask positive news in the real-time rental market, which has seen minimal inflation for about two years, economists said. Average rents actually deflated, meaning prices actually fell, by 1% in the second quarter of 2024 versus a year earlier, according to the BLS New Tenant Rent Index.

However, shelter CPI inflation has appeared to defy gravity lately: It increased on a monthly basis for two consecutive months, from 0.2% in June to 0.4% in July, and then to 0.5% in August.
“It’s puzzling, in all honesty,” House said. “[But] I’m of the view that we should continue to see shelter decelerate” given broader trends in the rental market.

Other ‘notable’ categories

More broadly, other categories with “notable increases” over the past year include motor vehicle insurance, where prices are up 16.5% from August 2023; medical care, up 3%; recreation, up 1.6%; and education, up 3.1%, the BLS said.
A surge in new and used car prices a few years ago is likely now fueling high inflation for car insurance premiums and vehicle repair, since it generally costs more to insure and repair pricier cars, economists said.

Insurance inflation should ultimately fade alongside falling car prices, they said. New vehicle prices are down about 1% over the past year, and those for used cars and trucks have declined more than 10%.
Egg prices — which had surged in 2022 due to a historic outbreak of bird flu — are rising again following a reemergence of the deadly disease. They’re up 28% from a year ago.
Overall annual grocery inflation was less than 1% in August, down from an average 11.4% in 2022, which was the highest since 1979.
Gasoline prices are also down about 10% over the past year. More

With fewer than 60 days until the election, investors may feel stressed by the flurry of tax policy proposals. Those emotions can trigger rash financial decisions, experts say.
But tax law changes require Congressional approval and future control of the House and Senate remains uncertain.
“We don’t make any changes until the law has passed,” said CFP Louis Barajas, CEO of International Private Wealth Advisors.

People watch the presidential debate between Republican presidential nominee and former U.S. President Donald Trump and Democratic presidential nominee and U.S. Vice President Kamala Harris at a watch party hosted by the New York Young Republican Club, in New York City, U.S., September 10, 2024. 
Adam Gray | Reuters

With fewer than 60 days until the election, investors may feel stressed by the flurry of tax policy proposals. Those emotions can trigger rash financial decisions, experts say.
Democratic presidential nominee Vice President Kamala Harris has plans for middle-class tax cuts while raising levies on the wealthiest Americans and corporations.

Meanwhile, former President Donald Trump, the Republican nominee, aims to extend tax breaks enacted during his first term and end taxes on Social Security benefits. Trump also supports higher tariffs, or taxes levied on imported goods from another country.
“There are sometimes knee-jerk reactions to some of these proposals,” said certified financial planner and enrolled agent Louis Barajas, who is CEO of International Private Wealth Advisors in Irvine, California.
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But there’s a big difference between a candidate’s tax idea or proposal and signed legislation. Tax law changes require Congressional approval, and future control of the House and Senate remains uncertain.
“All sorts of things are in presidential budgets that don’t get enacted,” said CFP and financial therapist Rick Kahler, president of Kahler Financial Group in Rapid City, South Dakota. 

Trump’s expiring tax cuts

We don’t make any changes until the law has passed.

Louis Barajas
nternational Private Wealth Advisors

“We don’t make any changes until the law has passed,” said Barajas, who is a member of CNBC’s Financial Advisor Council. Actions based on proposed tax law can backfire if the legislation isn’t enacted or details change amid lawmaker debates.
Plus, tax decisions need to align with long-term financial plans, he added.

Fear often comes from a ‘scarcity mindset’

Our emotions drive the vast majority of financial decisions, according to Kahler.
When a candidate proposes tax increases, “a scarcity mindset” often leads investors to believe that higher taxes will significantly reduce their resources, he said.
But regardless of your finances, you should “never make a decision when there is a strong emotion driving you,” Kahler said.
“If you’re scared to death, this is a good time to take a deep breath,” he said. “Emotions can get in the way of making a clean decision.” More

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Jonathan Raa | Nurphoto | Getty Images

Despite the increasingly partisan sentiment in the cryptocurrency industry, bitcoin will thrive over the long term regardless of who wins the U.S. presidential election in November.
That’s a view many crypto investors are coming to accept, as the wave of optimism spurred by former President Donald Trump’s pro-crypto overtures this summer starts to recede.

“Do I think we’ll be in the six figures by 2025? Almost certainly. Do I think we’ll be in the six figures regardless of who wins? Almost certainly,” said Steven Lubka, head of private clients and family offices at Swan Bitcoin. 
“Bitcoin has always been an investment that is rooted more in the fiscal and monetary profile of countries, sovereigns and the United States,” Lubka added. “Neither candidate changes that.”
Fears that a Kamala Harris presidency would somehow limit the price of bitcoin or drive it lower are overblown, said James Davies, co-founder at crypto trading platform Crypto Valley Exchange. Crypto startups may be more challenged, but the industry will continue to fight its way forward and thrive, he noted. It helps that bitcoin became more institutionalized than ever this year with the introduction of U.S. bitcoin exchange traded funds.
“Some of our communities … have become echo chambers and are convinced the sky will fall if one side or the other wins,” Davies said. “The truth is that the market is robust, not centered on the U.S., and hasn’t reacted negatively to major events from either side” of the partisan divide.
“This is about opportunities and regulation for U.S.-based users, not[the] price of a global commodity,” he added. “Crypto needs to learn from traditional finance, it needs to lobby both sides, align with both sides and succeed regardless of the election. If we want to build a big eco-system, we cannot afford to be partisan.”

Exaggerated risk
Lubka agreed that some observers “overplay the risks of a Harris presidency” because of the hostility the industry experienced during the Biden administration. That said, he added, “all of the signposts that we’re seeing with Harris continually represent a de-escalation” of the Biden-era crypto rhetoric.
“The election results will have minimal effects on how bitcoin performs over the next 12 to18 months,” said Tyrone Ross, founder and president of registered investment advisor 401 Financial. “There’s still a lot of firms working through ETF access, there’s rate cuts coming and trading by retail at the centralized custodians are at their lows. [It] definitely will be harder for young startups, but as a developing institutional grade, quality asset it will continue to prove itself no matter who is in office.”
Bitcoin has traded between $55,000 and $70,000 for most of 2024, after reaching its all-time high above $73,000 in March. Investors have widely expected the price to continue in this lull until U.S. voters decide the next president. Election news, however, has lately had less of an impact on bitcoin’s price, which is more influenced by macroeconomic developments.
After the debate on Tuesday night between Harris and Trump, bitcoin fell about 3%, although investors attributed that to interest rate updates in Japan and some positioning around U.S. inflation data for August that was released early Wednesday.
Growing partisan sentiment
In recent months, it had been speculated that the election would serve as an immediate catalyst for bitcoin – with many characterizing a potential second Trump presidency as a boon for the industry. The former president, for example, addressed the annual Bitcoin Conference in late July in Nashville, and ensured a reference was made a priority in the Republican Party Platform. This week, analysts at Bernstein said the way to invest in a potential Trump presidency is through bitcoin, adding that that if he wins on Nov. 5, the cryptocurrency could break to a new all-time high around $80,000. A Harris victory, however, could push bitcoin toward $40,000, Bernstein said.
“If Trump wins in November, will there be an immediate pump? Yes, absolutely. If Harris wins, could there be some immediate sell pressure? That certainly wouldn’t surprise me. But over the medium term, I don’t think that’s the dynamic,” said Lubka of Swan Bitcoin.
Vice President Harris has not shared a public view on crypto but parts of the industry are concerned she’s antagonistic to crypto and shares views of Senator Elizabeth Warren (D-Mass.) and Securities and Exchange Commission Chair Gary Gensler that are thought to be holding back crypto adoption.
“There hasn’t been clear statements, but there has been a bad history under the Biden administration … so I understand why people are paying attention,” Lubka said. 
Although there are concerns thanks to the Biden administration’s position on bitcoin, “I would remind investors … that bitcoin did great,” under the current adminustration, Lubka added. It “has been one of the most successful assets in the world during a period where everyone was opposed to it. Governments have traditionally been at least mildly hostile to bitcoin during its whole history, and it’s done extremely well.”
Bitcoin has been the top performing asset in all but three years since 2012. 

Daniel Cawrey, chief strategy officer at crypto wallet operator Tonkeeper, said there will likely be a short-term rally or muted market reaction depending on the eventual winner in November but that, either way, crypto is already better off this election season.
“This election has brought the crypto conversation to the forefront … Biden has pretty much ignored the industry,” Cawrey said. “Unlike Biden, however, Harris has not been taking a hands-off approach to crypto since elevating to be the Democratic nominee. Her campaign has been talking with stakeholders in the industry, which could mean better guidelines, which the industry needs.”

Don’t miss these cryptocurrency insights from CNBC PRO: More

U.S. homeowners are sitting on $32 trillion in home equity, a fresh all-time high. 
There are various options for tapping your home for cash, including a cash-out refinance, a home equity loan and a home equity line of credit.
In each case, however, high borrowing costs make it harder to access housing wealth. Here’s a look at where those rates stand.

Thanks to the runup in housing prices, homeowners now have more than $32 trillion in home equity as of the first quarter of 2024, according to the St. Louis Federal Reserve — an all-time high.
“It’s one of the very few things we can say about today’s housing market that is, more or less, positive,” said Jacob Channel, senior economic analyst at LendingTree.

While the average borrower sits on roughly $214,000 in equity that can be tapped, 60% of homeowners have at least $100,000, the Intercontinental Exchange’s Mortgage Monitor also found. Tappable equity is the amount most lenders will allow you to take out while still leaving 20% in the home as a cushion.
Rising home prices have “continued to build the fortunes of existing homeowners, pushing tappable equity to its highest level ever,” said Andy Walden, vice president of research and analysis at the Intercontinental Exchange.

How to tap your home for cash

Although homeowners are sitting on a record amount of housing wealth, the cost of borrowing against your home is also near the highest it’s been in recent years largely due to a series of rate hikes by the Federal Reserve, according to Greg McBride, chief financial analyst at Bankrate.com.
High interest rates makes access to home equity more challenging.
“There’s a long-held sense that it’s a cheap source of funds, but that paradigm has changed,” McBride said.

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In the aftermath of the pandemic, many existing homeowners refinanced their mortgage when interest rates hit rock bottom and pocketed the difference as a lump sum.
Currently, with mortgage rates around 6.3%, fewer homeowners are jumping at the chance to do a cash-out refinance.
“As rates come down, you might see more opportunities for a cash-out refi, but nobody is going to confuse it with 2021,” McBride said, referring to the period of “ultra-low” rates after the Fed slashed its benchmark to near zero.
And yet, some homeowners are already more willing to refinance now that mortgage rates are down from recent highs — as of the latest reading, mortgage refinance demand is more than 100% higher than a year ago.

Alternatively, a home equity loan is a type of second mortgage, which allows borrowers to pull cash while using the house as collateral. In this case, the loan comes as a lump sum with a fixed rate.
“A home equity loan could be a good option for homeowners who want to raise money to pay for renovations, either to make the home more to their liking, or to fix it up before selling the home next year,” said Holden Lewis, home and mortgage expert at NerdWallet.
However, the current average home equity loan interest rate is 8.52%, according to Bankrate, notably higher than a 30-year fixed-rate mortgage.
In this case, as well, “elevated rates have contributed to homeowners’ reluctance to take out fixed-rate home equity loans,” Lewis said, “but some of that trepidation will melt as rates drop.”

Otherwise, a home equity line of credit, also known as a HELOC, lets you borrow money against a portion of your home’s equity. Instead of taking out a home loan at a fixed amount, a HELOC is a revolving line of credit — but with better rates than a credit card — that you can use when you want to or just have on hand.
The average HELOC interest rate is just shy of 10%, according to Bankrate. While those rates are high compared with the typical mortgage or home loan, they are significantly lower than what it costs to borrow on credit cards, which charge more than 20%, on average.

Factor in the terms, rates and risks

Of course, different lenders will also offer different terms and interest rates, according to LendingTree’s Channel.
Channel recommends talking to several mortgage companies or loan officers, as well as weighing all of the costs before deciding what course of action makes the most sense.
When it comes to borrowing against your home, the rate and terms of a loan are not the only considerations, he added. There are also risks associated with tapping your home for cash.
“Defaulting on a home equity loan can have serious negative consequences,” Channel said.
Chief among them is that failure to pay back a home equity loan can result in foreclosure, he said. Even if it doesn’t, it can still ruin your credit and otherwise make it much harder for you to get approved for another loan — regardless of the type.
“The best piece of advice is to be thorough and to plan ahead,” Channel said. “Make sure you are in position that whatever you borrow, you will be able to pay back. This isn’t one of those things you should try to wing.”
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