The days of nearly “free” money are coming to an end.

After months of alarming inflation numbers, the Fed has raised interest rates and signaled additional hikes are on the way. Now that the central bank is pumping the brakes in an effort to cool off the economy, businesses won’t find it as easy to borrow money and fuel ongoing growth.

It’s not all bad news.

The rise in interest rates—which will likely continue via five to six smaller increases throughout the remainder of 2022—has only started recently, so businesses that act quickly can still take advantage of the current situation. Refinancing existing business debt before rates climb higher could position you for growth and efficient business operations for years to come.

Inflation has been a hot economic topic for months now, but the temperature spiked sharply when the Bureau of Labor Statistics (BLS) released Consumer Price Index (CPI) numbers for April. With the cost of consumer goods up 8.3% year over year, the report painted a picture of the highest inflation rate since 1981 and shattered hopes that the rising tide of inflation would ebb any time soon. As price increases outpace even the significant gains workers have made in pay over the past year, many economists are rightfully concerned that the economy is overheated.

The federal funds rate—the interest rate banks charge each other to borrow reserve funds—is one of the best tools the Fed has for combating inflation, and the Federal Open Market Committee (FOMC) opted to raise it by a half a percentage point in May.

Source: Is Now The Time To Refinance Your Business Debt?