Federal Reserve Raises Interest Rates by a Quarter Point, Citing Rising Inflation

For farmers and other rural borrowers, the rate increase could mean higher borrowing costs, particularly for variable-rate operating loans.

interest rates_financial graph on technology abstract background_Photo by monsitj via Adobe Stock_190463205.jpg

Photo by monsitj via Adobe Stock

WASHINGTON, D.C. (RFD NEWS) — The Federal Reserve raised its benchmark interest rate by a quarter percentage point Wednesday, bringing the federal funds target range to 3.75 percent to 4 percent.

The Federal Open Market Committee approved the increase in a unanimous 12-0 vote, citing elevated inflation and continued economic growth.

The Fed said economic activity is expanding at a solid pace, with resilient domestic spending, strong productivity growth, and robust capital investment. It also said job gains have kept pace with the workforce and the unemployment rate has changed little.

For farmers and other rural borrowers, the rate increase could mean higher borrowing costs, particularly for variable-rate operating loans and other credit that adjusts with market rates. Producers financing equipment, land or other major purchases could also face higher costs when taking out or refinancing loans.

However, existing fixed-rate loans generally will not see their rates change as a direct result of Wednesday’s decision.

The Fed said the rate increase is intended to bring inflation back to its 2 percent goal more quickly.

Related Stories
A botched art deal demonstrates the dangers of relying on informal understandings when money changes hands.
FSA lending jumped 25% as producers faced higher costs and tighter working capital.
Producers will have access to the modernized platform for fall-seeded crops.
Diesel near $6 per gallon raises harvest and transportation costs while adding another expense to already-tight farm margins. Mike Steenhoek with the Soy Transportation Coalition discusses rising diesel prices, transportation costs, and their impact on farmers.

Marion is a digital content manager for RFD News and FarmHER + RanchHER. She started working for Rural Media Group in May 2022, bringing a decade of digital experience in broadcast media and some cooking experience to the team.

LATEST STORIES BY THIS AUTHOR:

AARP Community Challenge grants are supporting small projects focused on transportation, gathering spaces, walking trails, and community gardens.
RealAg Radio’s Lyndsey Smith says Canada’s Investment Summit targeted global capital, aiming to attract it and expand Canada’s investment reach beyond the United States.
Sen. John Boozman (R-AR), chairman of the Senate Ag Committee, discusses Farm Bill 2.0, the challenges facing producers, and the path forward for the legislation ahead of Wednesday’s committee vote.
Canada’s new $1 billion Agri-Food Finance Fund will provide loans, not grants, for domestic food manufacturing and value-added processing projects.
Durango Boots’ National Day of the Cowgirl Scholarship winner Presley Cooper shares her future career plans, her Western roots, collegiate rodeo career, and goals for the future.
Roger McEowen discusses the federal court ruling on H-2A wage rates and its implications for agricultural employers.