LUBBOCK, Texas (RFD NEWS) — U.S. interest rate relief in 2026 is likely to be modest, with only limited cuts expected as the Federal Reserve balances easing inflation against labor market conditions. According to an analysis by Andrew Wright, an assistant professor and extension economist with Texas A&M AgriLife Extension, the Federal Reserve is signaling caution rather than a rapid shift toward lower borrowing costs.
After aggressive rate hikes in 2022 and gradual easing beginning in late 2024, the federal funds rate held mostly steady through 2025 before modest cuts resumed in the fall. The Federal Open Market Committee’s latest projections show broad agreement on economic growth and inflation, but less consensus on how far rates should fall. The median outlook suggests a single quarter-point rate cut sometime in the second half of 2026.
If that path holds, the federal funds rate would likely move from roughly 3.5–3.75 percent early in the year to around 3.25–3.5 percent later in 2026. Agricultural lending rates typically track 4–5 percentage points above the federal funds rate, implying operating loan rates could remain in the mid-to-upper 7 percent range, with real estate and intermediate loans slightly lower.
Wright notes that actual borrowing costs will continue to vary widely based on lender relationships, balance sheets, and borrower risk profiles, keeping credit discipline front and center for producers.
Farm-Level Takeaway: Modest rate relief may come late in 2026, but borrowing costs are likely to stay elevated.
Tony St. James, RFD NEWS Markets Specialist
Texas Cattle Feeders Association Chairman Robby Kirkland explains how the ongoing U.S.-Mexico border closure impacts feed yards that rely on Mexican cattle due to the New World Screwworm.
November 06, 2025 12:01 PM
·
Global nitrogen and phosphate prices remain high despite improved supply fundamentals, with limited Chinese exports and stronger fall applications tightening availability.
November 06, 2025 11:16 AM
·
Record output, larger stocks, and softer exports point to a well-supplied domestic ethanol market as harvest progresses.
November 06, 2025 10:53 AM
·
The Court may limit emergency tariff powers, complicating a key bargaining tool; ag could see shifts in input costs and export dynamics as China, Brazil, and India talks evolve.
November 06, 2025 10:04 AM
·
RFD-TV expert Roger McEowen explains why a “skinny” Farm Bill is likely in the future, but its scope may change due to provisions contained in the Big, Beautiful Bill.
November 05, 2025 03:19 PM
·
U.S. sugar producers and processors should brace for price pressure and challenging export logistics with global sugar supply ramping up — driven by Brazil, India, and Thailand — especially at the raw processing level.
November 05, 2025 01:02 PM
·
The Farm Bureau urges trade enforcement, biofuel growth, fair input pricing, and pro-farmer policy reforms to restore long-term certainty.
November 05, 2025 11:41 AM
·
A SCOTUS ruling on Trump’s tariffs could have long-term implications on the authority of future administrations to control U.S. trade policy, according to RFD-TV legal expert Roger McEowen.
November 05, 2025 11:08 AM
·
The Sheinbaum–Rollins meeting signals progress, but the focus remains on fully containing screwworm before cross-border movement resumes.
November 05, 2025 10:18 AM
·
