Cape Girardeau bankers want Fed to 'pause' rate hikes

Local banking industry leaders are advocating a halt in future interest rates hikes by the Federal Reserve Board — with the Fed last week issuing its 10th consecutive increase since March 2022, pushing the federal funds rate to its highest level since 2007.

Wade Bartels,Alliance Bank

Wade Bartels,Alliance Bank

Wade Bartels, president/CEO of Alliance Bank: "The Fed should take a pause. There's a lot of uncertainty in the economy, and taking a pause makes sense to really get a read on where inflation and recessionary metrics are trending. Recent increases have had a tightening effect, so I think it's time the dust settles."

Robbie Guard,MRV Bank

Robbie Guard,MRV Bank

Robbie Guard, senior vice president and market president of MRV Banks: "I'm not sure anyone in the banking industry would support another rate hike, and I don't either, even though it is only 25 basis points. The average business has now seen interest expenses double in less than a year, while consumer borrowing has waned. The double whammy of inflation and interest expense will only make it harder for consumers to make ends meet."

Clint Karnes,Wood & Huston

Clint Karnes,Wood & Huston

Clint Karnes, Wood & Huston community bank president: "I would prefer a holding period, as inflation has somewhat steadied, and truly hope policymakers take a pause. It would be the best thing for our customers who are tired of higher borrowing costs."

Jim Limbaugh,Montgomery Bank

Jim Limbaugh,Montgomery Bank

Jim Limbaugh, Montgomery Bank executive vice president and regional president: "We think this rate hike has already been baked into the markets. The bigger question is what, if any, indications will the Fed make about future increases or will there be a leveling off period? Some prognosticators think the Fed may actually begin lowering rates toward the end of this year or early 2024. There is still a lot of noise in the markets about inflation and its impact on both consumers and businesses."

Jay Knudtson,First Missouri State Bank

Jay Knudtson,First Missouri State Bank

Jay Knudtson, First Missouri State Bank executive vice president: "The Fed clearly believes these unprecedented rate hikes will stem inflation and right-size our economy, but I believe they will have significant collateral damage. Many consumers have established lifestyles around very nice things requiring borrowing, (but) these hikes will have a devastating impact on households and businesses. The harsh reality is, the timing is colliding with both inflation and with the government's stimulus 'money well' going dry. All the free government money pumped into the economy over the last 24 months has now run out. Households and businesses now must rely on their own organic cashflow and revenue streams to survive, and unfortunately, many will just not weather the storm."

Phil Moore,Banterra Bank

Phil Moore,Banterra Bank

Phil Moore, Banterra Bank market executive, SEMO region: "Hopefully we are near the top (with) no more additional increases, but there is no way to know what the future holds."

Other economic news

The economy added 253,000 jobs in April, according to data released Friday by the Bureau of Labor Statistics. A preponderance of analysts had been predicting a slowdown in the job market.

The unemployment rate for April fell to 3.4% — matching a 53-year low hit in January — from 3.5% the month before. The labor force participation rate held steady at 62.6%.

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