0321 Federal Reserve Interest Rates Hike Part 2

0321 Federal Reserve Interest Rates Hike Part 2

Corryn La Rue
Corryn La Rue
The Federal Reserve increased nation-wide interest rates by a fourth of a percent. Thanks for joining us for part two of this story. At the Professional Dairy Producers of Wisconsin Business Conference, Mike North of EverAG says the increase was unavoidable. He expects the current environment to continue.

“For the short term, yes. In markets like this, where there is a lot of question around the future availability of product, absolutely. Because as we talked about Ukraine it is possible that 25 to 30 percent of their ground will not get planted. They are a big supplier to the world market, and as long as we have risk in that particular market, the way we do, and we do, bottom line is, is that premium on the front end of this market is going to remain.”

North says farmers and consumers already see the impact.

“The market got way out in front of this and if you go back and you take a look at where rates are on the forward curve, the private market has already traded out in front of this move and has been there for the last six months. We've been trading against the three to five percent inflation rate, we've been ultimately preparing for a hike, and private markets have already moved rates back to pre-COVID levels.”

This is one of the first hikes in three years, and experts say it’s the first in line of at least six hikes this year alone.

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