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March Consumer Inflation Report: Small Business Owners No Longer Believe the Fed Will Lower Rates This Year

 As supplier prices continue to climb for small business owners, there’s been a change in sentiment; a majority of business owners now believe that the Fed will either keep rates unchanged or raise them this year 


The Consumer Price Index released by the Bureau of Labor Statistics increased 0.4 percent in March. This morning’s report sets off more alarms for the business community, especially after Friday’s surprisingly strong jobs report, who believes that today’s results will convince the Federal Reserve to keep rates unchanged for a longer period.  Over the past year, the index rose 3.5 percent prior to seasonal adjustment. 

“Look, it’s a political year, and so anything can happen,” Andrew Crapuchettes, RedBalloon CEO, said. “But there’s a lot of skepticism out there among the small business community. Most now believe the Fed will keep rates unchanged or actually raise them.” 

In the March Freedom Economy survey of over 80,000 small business owners, 33% said that the Fed will leave rates unchanged, and another 29% said they believe the Fed will raise rates.  Only 24% said they believe a “small” rate cut will happen this year. 

Additionally, 75% of business owners say that a rate cut would have little to no impact on their business.  And, 3 out of 4 business owners report that their supplier prices have increased in the last 30 days. 




The number of small business owners who expect inflation to “remain high” has dropped to its lowest level in 4 months, another sign of improving sentiment.

Yet there’s been a decided shift in expectations of the Fed lowering rates this year. More small business owners now believe that the Fed will keep rates unchanged than those who believe the Fed will lower rates. And 30% now believe that an additional rate hike could be on the table.

We asked small business owners what type of impact an interest rate cut of .25% to 0.5% by the Federal Reserve would have on their business. Respondents weren’t impressed. 44% said it would have no impact, and another 31% said it would have “little” impact.  

Wholesale prices continue to steadily rise, with 3 out of 4 small business owners reporting that their supplier prices increased in the last 30 days. Yet, 2/3rds of these small businesses have kept their prices unchanged.

Whichever way the Federal Reserve ends up going, their decision could have huge implications when it comes to elections and November. Small businesses are demanding results, and they aren't afraid to make their voices heard.


The Freedom Economy Index surveyed a universe of over 80,000 small business owners throughout the United States, fielding the questionnaire from March 15-19, 2024, with 839 respondents. The survey has a margin of error of +/-3.0% at the 95% confidence level. Download the March report here. 




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