The Federal Reserve has hinted that a rise in interest rates could be just around the corner – and that it could be somewhere in the neighborhood of half a percentage point or more. Give us the over-under from AFS’s perspective.
It wouldn’t surprise us. In fact, we’d be surprised if the Federal Reserve didn’t significantly increase interest rates, because with inflation skyrocketing, something’s clearly got to give.
That said, it’s been a long time since the country has had to deal with such a substantial bump. In fact, the last time it happened, the top song in the country was by Santana, the minimum wage was $5.15 per hour, and a cable blackout had impacted 3.5 million homes. (Yep, we’re talking May 2000.) As a result, some of us may be a bit fuzzy on how we successfully weathered it the last time around.
In light of that, maybe we should be asking YOU a question about this topic instead: With financing about to become more expensive, how does your company plan to react? Will you:
- Hold onto cash longer and perhaps extend a carrier payment terms
- Lock in lower rates now
- Wait and see
- Do nothing
We’ll talk about the pros and cons of each answer in a future issue – and share some thoughts about how higher rates could impact the supply chain. So, watch this space. And keep those antacids handy!