Interest rates could remain steady

An ag economist says he expects the Federal Reserve to wait and see if more interest rate hikes are needed.

Brian Briggeman with Kansas State University tells Brownfield early indications are for rates to hold at the end of this month, but the economy is strong enough to support further increases.

“I would like to see interest rates go up by 25 basis points, but if you’re asking me what I think will actually happen, the Fed is going to hold rates steady in the short term.”

The former economist for the Kansas City Fed says farmers need to focus on business fundamentals to see how they can absorb the higher cost of borrowing.

“We’re starting to get into that range where you really need to sit down and pencil it out to understand how will that higher debt cost affect your bottom line,” he recommends.

He suggests running farm budgets through stress tests to see where input cost changes could impact management decisions and focusing on ways to improve efficiencies.

Brownfield interviewed Briggerman during the Michigan Ag Credit Conference.

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