Interest Rates on going up, but how fast are they rising and what should you expect when you talk to your lender this year?
"If we keep saying interest rates are going up, eventually we’ll be right," says Keith Lane senior vice president in agribusiness with Farm Credit Mid America. Since 1955, over 85% of the recorded interest rates have been higher than today’s current rates; which means there is certainly room for rates to go up and according to historic data, this cycle of low rates is nearing its end.
Lane admits he doesn't foresee any big, immediate hikes in rates, but the Federal Reserve does show indications of a possible rise this year.
As you budget, expect rates to rise and keep that in mind when evaluating your finances. One thing farmers should think about, Lane advises, is to look at fixed rates and while we might not be hitting the lows in rates right now, they are still favorable rates.
This is not all doom and gloom, though. It might simply mean tightening the belt.
“We’re gonna make some money, just not nearly as much,” Lane says.
Do some what-if scenarios to see what you can and can’t do financially. This way, you’ll know what all your options are and reduce risk down the road.
Listen to the full interview with Keith Lane on Straight from the Heartland:
Hear more from Pam Fretwell on Straight from the Heartland.