As commodity prices falter and profit margins remain thin, U.S. agricultural producers will be eager to minimize costs of production in 2016. News reports have indicated that some producers are already cutting back on spending for seed and fertilizer.
With respect to interest rates, Binyamin Applebaum reported in today’s New York Times that, “Janet L. Yellen, the Federal Reserve chairwoman, said on Tuesday that the United States economy remained on track despite a rough start to the year because the drag from weak growth in other countries was being offset by lower borrowing costs.
“Ms. Yellen told the Economic Club of New York that the economy ‘had proven remarkably resilient,’ and that the Fed expected better days ahead. She said the Fed still intended to pursue a careful, patient course toward higher interest rates as the economy improved.
“The cautious tone of her remarks, however, suggested no rate increase was likely at the Fed’s next meeting, in April, shifting the eyes of Fed watchers to its subsequent meeting in June.”
The Times article explained that, “The Fed’s policy-making committee indicated after its most recent meeting, this month, that it now expected to raise rates by about half a percentage point this year.
“That was half as much as the Fed had predicted at the beginning of the year.
“Ms. Yellen attributed the deceleration on Tuesday to a judgment by Fed officials that somewhat lower rates were necessary to maintain steady growth.”
And David Harrison and Michael S. Derby stated in today’s Wall Street Journal that, “Global economic and financial uncertainty poses risks to the U.S. economy and justifies a slower path of interest-rate increases, Federal Reserve Chairwoman Janet Yellen said in remarks that suggested little appetite to raise rates when officials meet next month.”