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Optimism for lower interest rates
The leader of a banking organization says cash flow is tight for most farmers, and some are concerned about their balance sheets and high operating costs with low commodity prices.
Rose Oswald Poels with the Wisconsin Bankers Association tells Brownfield she wouldn’t call this a full recession, but ag and other sectors of the economy are definitely showing signs of strain. She is optimistic interest rates will be cut yet this year, bringing some relief. “I think the signs are pointing at potentially two cuts this year which you know doesn’t always translate immediatly into relief with your borrowers but you know, those refinancing conversations will certainly start once those rates begin to lower.”
And once the feds do lower the interest rate, Oswald Poels says the local banks can start considering lower rates for their customers. “You know, at the most someone would have to wait is a year or less to be able to reprice their debt, and again, depending on the situation, that could certainly happen sooner.”
Oswald Poels says banks will look at the marketplace and adjust as needed, but says it’s usually not very long after the Federal Reserve makes a rate change.
Oswald Poels says farmers are very resilient and the ag lenders that have worked with them for decades or generations understand the economic cycles, and she says farmers having conversations with lenders is the best way to get through the economic downturn.
Audio: Rose Oswald Poels discusses the rural financial picture and interest rates with Brownfield’s Larry Lee.
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