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Ag economist says Fed could lower interest rates in ’24

An ag economist says there was a tone shift from the Federal Reserve after it held interest rates steady for a third consecutive month. David Widmar, with Agricultural Economic Insights, says there have been some gains in the battle against inflation. “And then they signaled the possibility of three rate declines for 2024,” he says.

He says he’ll continue to monitor long-term interest rates in the new year.  “Long-term interest rates are more impactful on the farm economy than those fed short-term rates,” he says.

Widmar tells Brownfield those rates have been rising in the last half of the year.  “There’s not a direct one-to-one connection between what the Fed does on those short-term rates and what happens with long-term rates that producers are thinking about when it comes to borrowing for machinery, borrowing for homes, or borrowing for farmland,” he says.  “Or even that relationship between farmland values and those 10-year treasuries as well.”

While inflation has curbed some, he says he doesn’t expect the battle to end anytime soon.