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
Rep. Mike Simpson (R-ID) joined us on Champions of Rural America to share his insights on upcoming changes to public land management and how they will benefit agriculture and the Western working class.
September 11, 2025 01:21 PM
·
As the White House works to close the trade gap, patience is wearing thin for some lawmakers. Senator Chuck Grassley (R-IA) says farmers are getting backed into a corner.
September 11, 2025 11:26 AM
·
RealAg Radio host Sean Haney joins us for a Canadian perspective on President Trump’s controversial tariff rollout, lower court rulings, and upcoming review by the U.S. Supreme Court.
September 10, 2025 03:10 PM
·
The Interior Department is proposing to repeal the Bureau of Land Management’s Public Lands Rule. This move would make huge strides to empower local decision-making and restore balance between conservation and protecting rural livelihoods tied to these public lands.
September 10, 2025 02:45 PM
·
September 10, 2025 02:23 PM
The Supplemental Nutrition Assistance Program (SNAP) was once again on the national stage, front and center this week before the House Agriculture Committee.
September 10, 2025 11:10 AM
·
Pressure to lower gas prices across the Golden State could be the saving grace of this year’s corn harvest. California may soon be the final U.S. state to approve E-15 sales.
September 09, 2025 11:12 AM
·
Both Congressional Ag Committees took up the bill over the summer, but there’s no word on when the Senate could move forward; it does expire on September 30.
September 09, 2025 10:37 AM
·
Lewie Pugh, with the Owner-Operator Independent Drivers Association, joined us on Monday’s Market Day Report with his insights on the incident and a deeper dive into the issues at hand.
September 08, 2025 12:00 PM
·
