[July 2019] Fed Rate Cut: Is Your Business Prepared?

According to the Federal Reserve’s June meeting minutes, a Fed rate cut may be approaching. This landmark cut could be the extra push that small business owners need to reach new horizons.

Trump’s tax regulations have created an environment in which small businesses thrive. But with a bleak global economy, the rate cuts recommended by Federal Reserve officials would lay the groundwork for continued small business growth.

Did the Fed Raise Interest Rates? Not Yet!

Officials within the Fed are recommending a more accommodating economic policy at home, especially with sky-high growth aspirations in the nation’s economy. This rate cut comes after several rate increases, which Trump has previously voiced his opposition to

According to minutes recorded during the June meeting, “a near-term cut in the target range for the federal funds rate could help cushion the effects of possible future adverse shocks to the economy,” which could come in the wake of international events.

Economists aren’t predicting a major change in the rate drop, either. Experts say that the rate drop could be as minor as a quarter of a percentage point, from the current range of 2.25-2.5%. This drop would put the rate range at an even 2-2.25%, and would prove extremely beneficial to anyone looking for small business loans

Rate cuts wouldn’t only impact small business owners, though. These Fed rate cuts would also make home and car purchases more accessible to consumers wary of high interest rates.

Fed Rate Cut Probability

Despite the lack of action thus far, traders are confident the Federal Reserve rate cut will indeed occur. According to the CME Group FedWatch tool, the probability of a rate cut is listed at 100%. While this does not impact the likelihood it will occur, this figure demonstrates one important thing: everyone is anticipating this shift.

The Fed has yet to act, but recent reports— specifically the minutes from the June 18th-19th meeting— support the likelihood of this move. In the minutes, the Fed claimed it will “act as appropriate”. The meeting minutes also noted that key economic officials might examine more data before acting on the rate cut. 

How the Fed Rate Cut Affects The Ongoing Trade War With China

Trade tensions with China have been a major factor in building anticipation for these rate drops. Experts claim that reducing the fed rate will ease market stress in China. With more freedom and breathing room, China may be more able and willing to come to a consensus in the long-running trade war.

Optimistically, the expected rate cut would also help push the inflation rate back to the 2% benchmark.

Helping America’s Small Business Owners Lead the Charge for Economic Growth

With this reduction in interest rate, the Fed hopes to benefit the small businesses that have been empowered by Trump’s taxes. 

The Fed rate provides guidelines for lenders about the interest rates they should be charging during transactions. As the economy ebbs and flows, these interest rates naturally change. By recommending that lenders charge lower interest rates, the government is placing great faith in continued small business growth.

Lower Interest Rates Mean Better Loan Opportunities With Higher Amounts!

While the Fed has not yet taken action, the Fed has indicated that it will act appropriately in order to provide the right economic environment to support fast-growing American businesses. Investors consider this rate cut to be a near certainty.

With capital available at lower rates, small business owners will have even more flexibility and fewer roadblocks in the way of funding. This funding can help business owners realize growth through several avenues, including expansions, hiring new employees, and more. 

This rate cut will reverberate into the pockets of small business owners, too. With the economy in the best position since the 2008 recession, business owners have all of the tools, conditions, and the rates that they need in order to grow. Working capital shortages, expansion loans, and other small business loans are easier than ever to access, and the Fed rate cut is only making it easier.

National is Here to Light the Way for Your Business Growth

Interest rates are down, and growth opportunity is withing your grasp— why limit yourself when you can compare options from multiple lenders through an online marketplace? 

With National’s marketplace of 75+ lenders, finding the best loan for your business is fast and simple. The best part? Funds can be available in as little as 24 hours.

After you fill out an application, a Business Financing Advisor will touch base with you to learn more about your business. Once we understand your needs, goals, and more about your business, we’ll find compatible lenders and the best loan options available. You’ll choose the option that best fits your business, receive funding, and be fully prepared to start growing your company.

Fill out our 60-second application to get started today!

About the Author, Matt Carrigan
Matt Carrigan is the Content Writer at National Business Capital & Services. He loves spending every day creating content to educate business owners across every industry about business growth strategies, and how they can access the funding they need!