Rising rates: The Fed raised interest rates in late December for the first time since 2006 - will it affect local businesses?

On Dec. 18, the Federal Reserve raised its interest rates from 3.25 percent to 3.5 percent. Six weeks later, The Associated Press reported that stock markets have plunged and oil prices have skidded, and the Dow Jones industrial average shed more than 7 percent of its value in the first three trading weeks of 2016.

Though the first few weeks have been turbulent on a national level, locally there is less cause for concern for banks and businesses.

Jim Limbaugh of Montgomery Bank doesn't see the increase as a hindrance.

"We haven't had a move in the prime rate in eight years. Historically, prime rates would fluctuate up and down and was very difficult for businesses to plan and anticipate," he says. "But with rates being at such historic lows for so long, a gradual increase in the cost of capital is not a deal-killer for businesses at this point, in their likelihood to grow and to borrow."

Kathy Bertrand, community bank president at First Midwest Bank in Cape Girardeau, says the customer response to the increase has been minimal. Pricing is complicated, she says, but the hope is that the lending rate businesses receive will move in proportion with the prime interest rate.

Cutline:Carolann Clem, a bridal consultant at The Andrew Jackson Bridal Co., sorts through dresses while helping a customer on Feb. 3.Glenn Landberg

"With each new loan, we've had that discussion. And so far, everyone understands," she says. At a quarter of a percent, she adds, there's been no pushback.

But Bertrand warns it is not a perfect science.

"It's such a delicate balance," she says. "When do you raise the rates and by how much? How much can a business withstand before they start passing it on to consumers?"

For now, some local businesses are not concerned. Chris Hutson of Hutson's Fine Furniture in Cape Girardeau doesn't expect to see a major change in his business.

"It's an ebb and flow," he says. "For a while it's been nice, the run we've had with low interest. But those things don't last. But in the whole scheme of things, it's not bad at all."

Carolann Clem, a bridal consultant at The Andrew Jackson Bridal Co., sorts through dresses while helping a customer on Feb. 3.Glenn Landberg

Justin Albright of the Andrew Jackson Bridal Co. in Cape Girardeau says an increase of a full percentage point may be a cause for concern, but a quarter of a percent is not. And if the rate does continue to increase, he suspects it would not cause businesses to raise their prices substantially. Instead, "it could slow individual business owners from investments in their business growth if they are relying on a bank loan to do it, as the cost to borrow money is higher," he says. But, he adds, that would have to be a substantial rise.

So the question that remains unanswered is: Will the interest rate be raised again?

"There are multiple schools of thought," says Bertrand. Reports vary from one publication to another about the amount the rate will rise, and the rate at which the increases will come. In late January, after taking stock of the perilous international situation, Fed officials issued a statement that suggested they might reduce the pace of future rate hikes, according to The Associated Press. But thus far, nothing has been determined.

Bertrand believes another increase may come, but not anytime soon. Though depending who you ask, she says, you'll get an entirely different answer.

Limbaugh expects small, systematic increases of .25 percent through 2016, ultimately landing around 4 percent. At that point, he suspects the Fed will take a break to evaluate the situation and "see if in fact an increase in interest rates becomes an impediment for growth."

As for Hutson, he says, "If you go with history, it probably will go up. It really depends on how well the economy does."