Welcome back to In Good Companies! This season, we’re exploring the forces shaping your business, inside and out—and to kick off Season Two, we’ve got a double whammy: inflation and interest rates.During COVID, the Federal Reserve cut its target range for the Federal Funds Rate to 0.00% to 0.25%. But now, in 2022, inflation has hit a 40-year high and interest rates are climbing again. In six short months, the Federal Funds Rate target range has risen steeply, from a range of 0% to 0.25%  to a range of 3.00% to 3.25%. High interest rates can have a substantial effect on businesses and consumers alike. So, how high will rates climb? And how long will they stay elevated?  One of the people best positioned to answer those questions is Dr. Lindsey Piegza, Chief Economist at Stifel: she’s spent her career translating the economy to a broad audience. Together, we’ll examine the relationship between interest and inflation, decode the Fed’s monetary policy and explore why this inflation might be particularly stubborn.As always, we’ll dig into what this means for you and your business: what indicators to pay attention to, how to adapt to a high-interest environment and why you should be especially cautious when inflation recedes.So join us! We’ve got your best interest at heart.Highlights:
Why our economic situation is deceptive (3:40)
Federal Funds Rate deep dive (6:20)
The relationship between inflation and interest rates (8:22)
Rate hikes in 2022 (9:09)
How the Fed uses interest rates as a communication tool (10:51)
What will drive the Fed’s decision-making (12:29)
The lag of monetary policy (14:09)
What happens if inflation doesn’t subside (16:13)
The effects of a high-interest environment on small business (19:05)
How inflation and interest affect consumer behavior (21:32)
Why caution and adaptability will be key (22:50)
Markets are cyclical (25:01)
Links:
Cadence Bank Website
Cadence Bank Twitter
Cadence Bank LinkedIn
Dr. Lindsey Piegza LinkedIn
Stifel Institutional Website
Stifel Financial LinkedIn
Federal Reserve –Summary of Economic Projections, September 2022
Gallup – Inflation Causing Hardship for Consumers
Feedback:If you have questions about the show or topics you'd like discussed in future episodes, email our producers, sheena.cochran@cadencebank.com or danielle.kernell@cadencebank.com.