Interest Rates Are Dropping — What Should Business Leaders Do Next?
Interest rates have begun to move in a direction we haven’t seen in quite some time. The Federal Reserve’s recent quarter-point cut brings the federal funds rate to its lowest level in over a year, and more reductions are expected before the end of the year. For many business leaders, this shift raises an important question: what now?
At Midwest BankCentre, we welcome the news of interest rates being lowered. When rates drop, it helps our clients — easing the cost of existing loans and opening the door for new projects to come online. As borrowing becomes more affordable, we see activity ramp up across the board.
But the decision to refinance, launch an expansion, or start a new project isn’t always simple. Many of our clients are carefully weighing a mix of market conditions as they plan their next move.
What’s Happening in the Market
Product costs remain elevated in many industries. Concrete prices, for example, remain at very high levels. Whether it’s steel, asphalt, lumber, or other materials, many business owners are still facing sticker shock. For some, that means delaying construction or expansion projects, even in a more favorable interest rate environment.
Tariffs are also beginning to ripple through supply chains, pushing up the costs of imported goods. Inflation, while moderating compared to last year’s highs, is still influencing decisions on when to invest and how to price products.
Meanwhile, the real estate markethere in the Midwest remains strong—with steady home prices and sales—unlike some coastal regions where they are experiencing price declines and slower sales.
And then there’s talent. In some industries, there are more skilled workers available today than we’ve seen in months. For companies looking to expand or accelerate operations, this could be the right moment to secure the talent they need.
Why Your Banker Should Be Part of the Conversation
This is exactly the time when having a strong relationship with a local banking partner matters most. Local bankers don’t just understand interest rates — they understand what’s happening in your own backyard. They bring insights from across the regional economy, sharing what peers and other businesses are experiencing so you can make more informed decisions. And because they know your business and your market, they can work alongside you to build a strategy that fits your unique timing and goals.
If you think rates will continue to come down and you’re considering refinancing or initiating a project as a result, reach out sooner rather than later. We often work with clients well in advance to plan for opportunities like these.
Lower rates present a window of opportunity — but the right timing depends on your unique circumstances. Connect with your trusted banker to explore your options and position your business for its next phase of growth.
It Matters Where You Bank™
Originally published in the St. Louis Business Journal’s Ask the Expert section in October of 2025 by Danny R. Pogue, President – Commercial, Retail, & Small Business Banking, Midwest BankCentre