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Inflation Report Primer: Small Businesses Have Abandoned Hopes for a 2024 Rate Cut

A new survey of 80,000 small businesses in the Freedom Economy by RedBalloon and PublicSquare found that 70% of small business owners now believe the Fed will either keep rates unchanged (33.4%) in 2024 or raise them this year (37.8%).   

 

And 64% now strongly believe the US economy is headed into stagflation - the situation where prices continue to rise while the economy fails to grow or even slips into recession. 

 

“Regardless of the messaging coming out of the White House, Main Street is laboring under high levels of inflation and high interest rates – and it doesn’t look like there is any relief on the horizon.” said Andrew Crapuchettes, RedBalloon CEO and longtime pioneer of developing labor market analytics for strategic business planning. 

 

“It cannot be emphasized enough that these small business owners are on the frontlines of the US economy. They’re in hand-to-hand combat for survival against inflation and a sagging economy. And because they feel what’s happening every day, their responses to the Freedom Economy survey have been spot-on month-after-month, accurately predicting the turns and twists of this post-COVID economy.”


Yes - Strongly 

63.8% 

Yes - Maybe 

23.6% 

Not Sure 

9.4% 

No 

0.3% 

Other 

2.9% 

Lower rates significantly 

3.4% 

Lower rates slightly 

13.6% 

Keep rates unchanged 

33.4% 

Raise rates 

37.8% 

Other 

11.9% 

  

In the May version of the survey, employers answered where inflation is hurting them and their families the most. Respondents rated consumer categories on a scale of 1-5, with 5 being where “inflation has hit them and their family the hardest.” Here’s how respondents assigned level-5 to the various categories.


Food 

80.1% 

Gas Prices 

67.2% 

Dining Out 

48.0% 

Utilities 

39.2% 

Housing 

37.3% 

Auto (buy/maintain) 

36.5% 

Insurance 

32.2% 

Travel 

28.8% 

Healthcare 

24.1% 

Clothing 

15.4% 


Methodology: 

 

The May 2024 Freedom Economy Index survey sampled opinions from a universe of over 80,000 small business owners from throughout the United States. The survey fielded from April 30 to May 10, with 754 respondents and a 4% margin of error at the 95% confidence level. 

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1 commentaire


It's alarming to see such high percentages of small business owners expecting stagflation and preparing for potential interest rate hikes. tunnel rush

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