Cotton Inc. Executive Update
U.S. Macroeconomic Indicators & the Cotton Supply Chain
Macroeconomic Overview: Following a meeting in late September, the Federal Reserve increased interest rates for the third time this year. The official statement from the central bank indicated that they have confidence that economic expansion will continue and suggested that interest rates will likely increase again in December. This official statement is updated after each meeting, and a notable revision in September was that a comment stating that monetary (interest rate) policy remained accommodative (stimulative) was removed.
A shift away from stimulative interest rates may eventually be a factor leading to slower economic growth (by making borrowing more expensive, spending can slow). Nonetheless, the process can be expected to be gradual. Despite the series of increases this year, the Federal Funds interest rate that the Federal Reserve controls remains near two percent. Apart from the extremely low rates maintained since the financial crisis and the stimulative rates put into place after the 2001 recession, the current Federal Funds rate still ranks as the lowest in the modern era (post-1965)