Citing strong economic progress, the Federal Reserve’s decision to raise rates for the second time since the financial crisis of 2008 has business owners asking when they’ll see banks tack the increase onto capital costs.
Announcing the rise at a press conference, Fed Chair Janet L. Yellen told reporters, “I would say at this point that fiscal policy is not obviously needed to provide stimulus to help us get back to full employment.”
According to the Fed, the increase of the federal funds rate might not be the last in the next twelve months. In a statement, the Fed said they expect economic conditions “will evolve in a manner that will warrant only gradual increases in the federal funds rate,” further supporting market expectations that rates will likely continue to rise over the next year.
Although only time will tell when the cost of capital will be bumped by lenders, it’s important for business owners to remain alert if their access to capital is changing — especially if the Fed predicts a brightening economic outlook. As the economy improves, interest rates are only going to increase.
Securing finance is traditionally easy to get when you don’t need it and when you need it, it’s hard to get, or it will likely cost you more. Low-risk businesses are usually is a better position to access…