WASHINGTON, DC (RFD-TV) — The Federal Reserve lowered its benchmark interest rate by a quarter-point on September 17, the first cut of 2025. Chair Jerome Powell said the move was a “risk management” step to support the labor market while inflation remains above target. The Fed also raised its 2026 inflation outlook, signaling persistent cost pressures across the economy.
For agriculture, the modest cut should slightly reduce borrowing costs on operating loans, land notes, and equipment financing, giving some relief to producers under heavy debt loads. At the same time, input costs for fuel, fertilizer, and labor remain elevated, limiting overall margin gains. A softer U.S. dollar could lend support to farm exports, but trade demand remains the dominant driver for prices.
Tony’s Farm-Level Takeaway: The Fed’s rate cut offers limited relief for farm credit costs, but persistent inflation keeps input prices high. Farmers may find refinancing opportunities, though cash-flow discipline remains critical.
Farmers are struggling with low commodity prices and skyrocketing input costs, resulting in debt that is outpacing income across the sector, according to the USDA’s new farm income forecast.
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Demand for farm loans surged in the first quarter of the year, topping the previous record set in 2016.
Roger McEowen with the Washburn School of Law joins us now with the highlights.
Following an on-target CPI, the combination could suggest that inflation is cooling.
