It looks like it’s time for an interest rate increase.
According to CNBC, the economic conditions and the financial markets are prepared for a rate increase. According to Dennis Lockhart, a voting member on the Federal Open Market Committee, the economy is on a “solid, moderate path,” warranting the Fed action.
Lockhart, who stated the economy is growing at about 2 percent, said that he expects a gradual path of rate increases once the initial hike happens. Another factor that is likely to influence the Fed’s decision is job growth in the US. Since the end of the recession, America has added 12 million jobs and unemployment has fallen from a peak of 10%, down to 5%.
So how is the rate increase going to affect businesses looking to purchase new equipment? What is important to remember, is that rates are being increased, but that doesn’t mean they are going to be high. If what Lockhart says is accurate, in that the rates will be increased on a gradual path, you still have a chance to secure a relatively low rate once the initial hike happens. Based on this information and that equipment investments are expected to grow by over 4% next year, late December or early 2016 still make for ideal times to purchase equipment for your business.