Ag Headlines, Friday June 17, 2016

Federal Reserve Holds Interest Rates Steady

The U.S. Federal Reserve Wednesday chose to keep its benchmark interest rate at current levels as economic growth has again been slower than The Fed predicted. Following a two-day meeting, The Fed also said it now expects to raise interest rates more slowly in coming years than it had previously anticipated. The New York Times suggests The Fed is struggling to adapt its plans to the reality of an economy that refuses to boom. Seven years after the official end of the recession, the news remains a mix of good and bad. Most recently, job growth has weakened even as broader measures of economic activity have picked up. A statement by The Fed said the domestic economy was feeling less drag from the weakness of the global economy, noting that exports have strengthened. However, Fed officials said before the meeting that they remained concerned about a relapse.

FSA Says Operating Loan Program Funding to Run Dry

For the second year in a row, USDA's Farm Service Agency says its $2.65-billion operating loan program will likely run out of funds before the end of the fiscal year. USDA officials say the funds will likely run dry by the end of June, around three months before next year's program starts on October first, according to Pro Farmer. Cash-strapped farmers and cautious banks have turned to the program amid the global grains downturn. These FSA loan guarantees and direct loans are typically considered loans of last resort, but an increasing number of agriculture lenders have turned to the program. The recent rebound in crop prices has not cooled demand. USDA data shows that at the end of May, applications for operating loans were up 23 percent and funding obligation had climbed 19 percent. USDA officials and banking experts estimate the backlog of applications could total as much as $650 million by October.

Source:  NAFB News