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Interest rate cuts unlikely, economist says

An ag economist says higher interest rates are one of the biggest risks facing the ag industry.

Dennis Shields is the chief economist for the Farm Credit Administration. “For the ag industry in particular, these elevated interest rates push up production costs and especially those with variable rates.”

He tells Brownfield rates are expected to remain steady with soaring inflation. “The market consensus at the beginning of this year was for six or seven rate cuts by the Fed. But with inflation remaining above the Fed target, prospects for these rate cuts dimmed as the year unfolded.”

Shields says the Federal Reserve has been hesitant to cut interest rates due to looming concerns of a recession.

AUDIO: Dennis Shields, Chief Economist for the Farm Credit Administration