Interest rates to remain low, possibly helping small businesses during the recession

8/10/2011

With the tumultuous state of the stock market spurring pessimism among investors and economists about the state of the recession, small business owners may be wary of expanding or starting a new venture. Interest rates are set to remain low in the near future however, which may make small businesses one sector that doesn't feel the impact of the recent market downturn.

The Federal Reserve expects to keep interest rates near the current low levels to spur economic recovery. In a statement released on Tuesday, the Reserve committee "anticipates that economic conditions - including low rates of resource utilization and a subdued outlook for inflation over the medium run - are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013."

As long as interest rates remain low, business loans may be more viable for many small businesses. While the news from the Reserve may have been one of the triggers for the losses on Wall Street, the goal is to help build economic gains and employment numbers (as well as ease inflation).

Small businesses employ more than half of the nation's private sector workers, so as they grow and strengthen, hopefully the overall economic situation will follow.