In the latest data, the Federal Reserve held the target range for the federal funds rate at 2.25-2.5 percent during its first policy meeting of 2019, and re-affirmed its position for patience about further policy firming in light of recent global economic and financial developments and muted inflation pressures.
The interest rate averaged 5.69 percent from 1971 until 2019, reaching an all time high of 20 percent in March of 1980 and a record low of 0.25 percent in December of 2008.
In its official statement the FOMC said:
“Information received since the Federal Open Market Committee met in December indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Job gains have been strong, on average, in recent months, and the unemployment rate has remained low. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier last year.”
So given the inscrutable Fed, the uncertain economy and the politics involved, basically the Fed is signaling that it is scaling back on hikes for this year. But all indications show that interest rates will remain at a high level.
The Bottom line – what does it mean for you?
Rising interest rates are both a blessing and a curse for small business owners.
Typically these rates lead to a stronger economy, and that allows staffing firms to flourish.
But on the downside, the rising rates will often lead to increased costs for new loans, existing variable loans and even your credit cards. This also makes it harder for start-ups to get a foot off the ground.
Also, while your clients may feel happy about a good economy and behave in an expansive mode, likely they will feel a pinch from the interest rates eventually and try to talk your rates down.
One solution to these problems is a funding company that can help you with your needs and navigate the growth and uncertainty that might come with opportunities and risk. When your bank tells you no to your expansion or growth model, we at Madison will work with you to find a financial solution.
We also offer business tools that allow you to get a dashboard of your business activity. This can help you project your business, and also push back (with data, of course) with customers trying to hit you on price.
Looking for the best-possible funding option?
At Madison, we offer you tried and true advice built from being the go-to funding company for staffing companies, with our DNA in the staffing industry and 25 years of service through ups and downs and the cycles that come into the staffing world. Consider interest rates an opportunity. If you’re looking for the best funding options, Give us a call today.