Fed. Interest Rates could hurt small business growth – 47abc

SALISBURY, Md- Despite a long-anticipated rate cute, the Federal Reserve decided to maintain the current interest rates at 7.9%, citing a failure to reach a goal of less than 2 percent inflation across the US.

In Wicomico County, Salisbury Area Chamber of Commerce President Bill Chambers tells WMDT the news comes at a difficult time when many businesses look to get bridge loans and lines of credit to scale up the workforce for the many seasonal businesses across the area.

He tells us the hospitality, restaurant, and entertainment venue sector could be hard hit, adding to a few tough years of dropping spending due to that inflation.

“This is presenting cash flow challenges for sure, and it makes meeting their financial obligations pretty difficult, and that’s payroll taxes, insurance, the things that businesses have to pay, and these higher interest rates, unfortunately, bad timing,” Chambers said.

He says the short-term rental market in vacation destinations including Ocean City could also be impacted, as condo rentals come with fixed 30-year interest rates at that same 7.9%. He tells us with interest rates staying flat, refinancing is also out of the picture for any small-scale landlords who could be losing money on that secondary income.

Chambers is hoping that the Fed will change their target from 2 percent annual interest to 3 percent, as he says the longer rates stay high the less consumers spend and the more businesses suffer.