May Federal Reserve Meeting: Last Rate Hike For This Year?

Kathy Bogardus

May 03, 2023

The Federal Reserve met today (May 3, 2023) to set rates and as our FBN® experts predicted last week, the Fed increased rates by 25 basis points, slowing its aggressive strategy of higher rate increases. 

According to a statement released by the Federal Reserve, 

“The U.S. banking system is sound and resilient. Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 5 to 5-1/4 percent. The Committee is strongly committed to returning inflation to its 2 percent objective.” (1)

In a press conference this afternoon, Fed Chairman Jerome Powell said, 

“From the perspective of monetary policy, our focus remains squarely on our dual mandate to promote maximum employment and stable prices for the American people. My colleagues and I understand the hardship that high inflation is causing and we remain strongly committed to bringing inflation back down to our two percent goal. Price stability is the responsibility of the Federal Reserve. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all. Today, the FOMC raised its policy interest rate by a quarter percentage point. Since early last year we've raised interest rates by a total of five percentage points in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.” (2)

While some are questioning whether this will be the last rate hike increase this year, the Fed has signaled they won’t continue to raise rates again.

Looking Forward

As the market continues to fluctuate with unpredictable volatility, it may be confusing and complicated when determining the best path forward for financing. And when land becomes available, it’s not always easy to sit and weigh your options of buying or not buying now. 

That’s why our customized financing options provide you the flexibility to decide your next move. Locking in a rate for 5 years to 15 years with variable rates may make sense if you’re planning to refinance or purchase more land in the near future.

But if you’re looking for a more stable and predictable option with your payments and budgeting, you may want to consider a fixed rate that starts at 10 years and goes up to 30 years. 

No matter what situation you’re in, FBN Finance is here to help you better understand the options available to make you feel confident in your decision.

We recently launched instant approvals* for our ag land loans. Now when you need land financing, the application process is much quicker. If you qualify, your land loan application could potentially be approved within minutes for land loans up to $2.5 million*. We want to help you finance your ag land, apply for a land loan now.

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May Preview (April 25, 2023)

With the Federal Reserve poised to meet again on May 2 to set interest rates, it looks like there is a possibility of yet another increase. The previous two increases were only 25 basis points, as the Federal Reserve slowed their pace of rate hikes.

The experts here at FBN® Finance have been closely monitoring these rate hikes over the past year. And with recent volatility in the market, our experts are predicting another increase of 25 basis points. 

Annual inflation peaked at a little over 9% in June of 2022 (1) and dipped to 5% in the March report. With inflation trending in the right direction, there is less pressure to keep raising rates at the same pace as last year.


[READ: Forecasting 2023 Farmland Values: Will U.S. Land Prices Decrease This Year?]


Commodity prices have eased and supply chain issues are starting to resolve. However, inflation is still above the Federal Reserve’s target and an increase of 25 bps is still expected. However, our experts expect this may be the last rate hike for a while. 

With recent issues in the banking system and the failure of institutions like Silicon Valley Bank, financial institutions are being even more conservative on creating loans which amplifies the rate hikes and adds another break on the economy.

What It Means For Farmers

With unpredictability still ahead for this year, locking in a shorter term rate may be a viable option to consider. Locking in a shorter term rate now still gives you the flexibility to refinance and take advantage of lower interest rates if they start to drop.

Solutions to Grow Your Business

Every farmer has a unique situation and we aim to make financing for family farmers simple and affordable. We provide a variety of options that may be useful in managing or growing your operation:

Land Loans

We recently launched instant decisions for our ag land loans. Now when you need land financing, the application process is much quicker. If you qualify, your land loan application could potentially be approved within minutes for land loans up to $2.5 million*. We want to help you finance your ag land, apply for a land loan now.

Operating Lines

Operating lines can help you fund your operation as you see fit. You could receive an instant decision on loans up to $1M. Learn more about how an operating line could benefit your operation.

Farmland Capital

Farmland Capital provides you the capital you need without impacting your original loan. Learn more here or start your application today.


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*Approval is conditional, and subject to final review and verification. Approval, loan closing, and funding are subject to the product’s terms and conditions, and underwriting. Length of time necessary to complete the financing process, if qualified, will vary and depend on one's individual circumstances. 

Financing offered by FBN Finance, LLC and its lending partners. Terms and conditions apply. To qualify, a borrower must be a member of Farmer’s Business Network, Inc. and meet all underwriting requirements. Interest rates and fees will vary depending on your individual situation. Not all applicants will qualify.

Disclaimer: The material provided is for educational purposes only. It is not intended to be a substitute for specific individualized tax, business, legal, investment or professional advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner, or investment manager. Neither Farmer's Business Network, Inc. nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in the material and any liability therefore is expressly disclaimed.

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Kathy Bogardus

May 03, 2023

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