The Fed and Your Business

Thanks for sharing this!

Is the US in a recession? Is inflation on the way? Should interest rates be raised or lowered?

Each day, in an attempt to keep the economy flowing in an orderly fashion, the Federal Reserve grapples with these questions, among others.

Whatever course the Fed takes, the results eventually trickle down to you and the business decisions you make to stay profitable. Keeping your business ahead of the game—or at least even—means keeping an eye on the Fed.

And that means being familiar with Fed speak.

For instance, say you notice interest rates on 30 year bonds have decreased. Then you hear the Fed Chairman report that interest rates on short term debt have increased. Put the two together and you have a scenario that signals a yield curve inversion—which could predict the start of an economic downturn.

The Fed’s next step might be to lower short term interest rates. Since lower rates can make the dollar weaker, foreign goods will most likely become more expensive.

Armed with that knowledge, you can plan to tout your “Made in America” products, advertise more aggressively, and offer temporary price promotions to bring in new customers. You might consider a construction loan while interest rates are low to update assets or renovate your building.

Like most management tools, interpreting Fed speak isn’t a precise science. But monitoring the Fed’s movements can give you one more way to successfully adapt your business to changing economic conditions.

You might also like these posts

Article – Preparing for Hurricane Season Image source: By Nilfanion , via Wikimedia Commons. The map shows the tracks of all tropical cyclones which formed worldwide from 1985 to 2005.The Atlantic hurricane season begins June 1. While the 2014 season is expected to be a mild one, mild doesn’t mean storm-free. Getting ready early is a good idea—and early preparati...
Article — Locked Out Image source: UK, public domain, via Wikimedia Commons What’s on your computer? Your manuscripts? Work? Photos? What would you do if you were denied access to those files—if you were locked out by rogue hackers? If you’re shaking your head because you think nothing on your computer is of value to hackers, consider th...
Article — Tax Identity Theft Awareness Week Image source: Taxes are scary enough, without adding tax identity theft to the mix. The costs—$3.6 billion a year according to an estimate by the US Treasury Inspector General for Tax Administration—are scary, too. Unfortunately, both tax ID theft and the costs are on the rise. The US Federal Trade Commission...
Article — Your 2013 Federal Income Tax Return Image source: Whether you’re a part- or full-time freelancer, receiving income means filing a tax return. Here are three things to keep in mind as you look back at your 2013 business activity. Dates: The IRS will begin accepting 2013 business returns on Monday, January 13, 2014. For individual returns, the da...

We write. Visit us in Carpenter Country, a magical place that, like our stories, is unreal but not untrue.

Posted in Articles Tagged with: ,