Banker economist on interest rate outlook
Washington Ag Today November 30, 2009 What’s one financial issue on the minds of Washington farmers for 2010? Blankenship: “With the current financial situation, deficit spending in Washington D.C., that can often give interest rate pressure down the road and we are concerned about that.” That’s the Washington Association of Wheat Growers new president Brett Blankenship. Interest rates were a topic at the recent 2009 Ag Bankers Conference and Keith Leggett, vice president and senior economist for the American Bankers Association provided his outlook for 2010. Leggett: “From my standpoint if you look at the last two recessions, what you found is that the Fed did not start did not start to raise interest rates until almost a year and a half after the unemployment rate peaked. So if you are looking at the unemployment rate peaking at sometime in 2010 you really are really talking about 2011 before you will even see the Fed begin to raise interest rates. So we are looking at the Fed funds rate staying between zero to ¼ percent. Overall that means borrowing costs for farmers are going to remain favorable.” Leggett says farmer balance sheets are in good shape with a declining debt-to-asset ratio and the increase in farmland values over the past decade has strengthened the balance sheets. I’m Bob Hoff and that’s Washington Ag Today on the Northwest Ag Information Network. ?
