Interest rates spent much of 2024 at or near the top of the news cycle. Matthew Bennett, co-founder of AgMarket.net, says it’s important to not forget about interest rates in 2025.
“I just don’t think you can cool them down too much, and if you do, when you do it quickly, I would be very concerned about the potential hyperinflation-type move. You know, most of the direction from the Fed is kind of cooled down to, ‘Hey, maybe we can get another quarter point this year.’ I think if you do, it’s a goodwill gesture at some point, maybe to try to get the market propped up if you will.”
He says it’s likely that there won’t be as many rate cuts in 2025.
“I just don’t think you’re going to get all the rate cuts that we thought, maybe eight months ago, we were going to get over the course of that next year and a half. It is a little concerning to me. I think the U.S. grower, particularly, it certainly impacts them whenever you’re putting 1,000 bucks an acre into a corn crop, you know, and most of us have to borrow to put that crop in. It inflates the cost of our production because a lot of us have a fair amount of money borrowed throughout the entire year, and so I’m very concerned that interest rates, long term, might creep up just a little. I know the administration doesn’t want that, but at the same time, if you do see hints of inflation continuing, there’s no doubt in my mind that you’re going to be hard-pressed to be able to lower interest rates.”