In case you missed it, the Fed just hiked interest rates for the SIXTH time this year, pushing rates to the highest level since 2008. With inflation stuck at record-breaking levels, the Fed has raised rates by another 75 basis points, and that’s bad news for small businesses.
By raising the interest rates, the Fed is intentionally making it more expensive to borrow money and that impacts things like small business loans or the rent for retail space. The idea is that if it’s more expensive, people will borrow less and spend less, and supply and demand means that prices will come down.
But unfortunately, many small businesses don't have the option to spend less. They still have to pay the cost of doing business, and that cost is exponentially higher due to inflation and ongoing supply chain issues.
Main Street has been forced to weather years of COVID-19 lockdowns and restrictions, and now, those who have managed to keep their doors open are faced with yet another crisis. The Biden Administration needs to do more to make it easier on job creators, starting by returning to pro-growth policies and reining in federal spending.
Until they do that, raising interest rates won’t be able to solve the problem. Hiking rates while still spending trillions of dollars is just more pain without any payoff.
Small businesses are truly the backbone of our economy and I’ll continue to work in Congress to help American businesses thrive and to be more competitive in the global marketplace.