The U.S. Federal Reserve has again elected to move forward with interest rate increases following a meeting Wednesday. According to the New York Times, widely expected, the decision raises the Fed’s benchmark rate to a range between 0.75 percent and one percent.
The Fed attributed the change to a continued “moderate pace” of the U.S. economy. For agriculture, a Department of Agriculture economist has previously said interest rate increases mean more of the same for the farm economy, which is slumping amid low commodity prices.
The increase will likely impact loans for big-ticket items, such as farm equipment or land purchases, as well as the prime rate, which is the base borrowing rate banks extend to their customers. The rate hike will increase the upward pressure on interest rates that consumers pay overall, but the immediate effect is likely to be modest.