Fed Lowers Interest Rates: Relief Ahead for Dealer Floorplan?
The Federal Reserve lowered interest rates by a quarter of a percentage point on Sept. 17, the first cut in 9 months and indicated more cuts would follow to halt any slide in a labor market.
This cut lowers the Fedās benchmark interest rate to a range of 4.0-4.25%. Economists are largely expecting at least one, if not two, more cuts yet this year.
President Donald Trump has been pushing for the central bank to reduce borrowing costs in order to juice economic growth, but the Fed said its decision was based on the need to support a weakening job market.
“Today was good news as operating rates for producers and dealersā floorplan rates should decrease,ā says Greg Roberg, AgDirect vice president of sales.
Roberg says while two more cuts would be nice to see, heās leaning toward one more cut being more likely, unless inflation falls further. āI believe the Federal Reserve will continue to manage toward a soft landing with interest rates and getting inflation to 2% is their focus,ā he says.
According to a Farm Ā鶹app Insider text poll, 43.3% of respondents said they could see a 1-2% bump in their year-end sales if they saw a quarter-point reduction from the Fed this week.
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