Interest Rates May Get Hike After Election
October 14, 2016

Interest Rates May Get Hike After Election

Top Story  |   |  By: Mike Opperman

Multiple sources this week suggested that a rise to interest rates may be coming as soon. While minutes revealed from a September Federal Reserve meeting didn’t give a specific timetable for raising rates, they reinforced market and analyst expectations that a change could be made in December after the U.S. presidential election.

According to a Wall Street Journal survey, about 74 percent of economists said they expected the Fed’s next move to come in December, especially if certain “economic developments unfolded”. The job market plays a significant role in that decision. As the unemployment rate continues to decline, a rise in the interest rate may be needed to slow down the economy and curb inflation.

As reported earlier this year, the direct impact of an interest rate hike won’t have a substantial impact on dairy producers, according to Ben Laine, senior economist at CoBank. He says borrowing costs will be affected but the impact won’t be as significant as the downward pressure of a potentially stronger dollar on exports and eventual milk price recovery.