NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — As the Federal Reserve prepares to meet Tuesday and Wednesday, Europe has already decided to cut interest rates and Creighton University economist Ernie Goss sees that as a potential negative for this part of the country.
"That really hurts exports," Goss said. "Of course, this part of the country, certainly including Kansas, depends on exports of agricultural goods, export of manufactured goods, and when the dollar rises in value, which is what that would produce, that makes it more difficult to sell goods from this part of the country or the U.S. in other parts of the world. That's a real concern, is the rising value of the dollar because of holding up interest rates too high for too long."
Even though the short term may be negative, Goss is still optimistic, on the whole.
"We're in the best spot of the best nation on the face of the earth, and we're going to do well in the long run," Goss said. "In other words, Boeing is going to find the solution to those problems and outcompete Airbus. I can't believe Airbus could ever outcompete Boeing, and they won't in the long term. Likewise, our agriculture, our manufacturing is going to come back. It's just right now, we've got to figure out this issue with debt. Americans are covered up with debt, and we're moving in the wrong direction."
The concern Goss sees is that the federal government may make it easier for people to borrow against their homes, driving them further into debt, rather than giving them reason to pare back their lifestyles and begin to pay it down. Ultimately, that could hit small community banks hard, if the value is siphoned off of those investments and then people can't pay those loans back.
"These community banks serve their customers," Goss said. "They know their customers. They know the agricultural economy. You have J.P. Morgan, for example. Does Jamie Dimon, head of J.P. Morgan, does he really understand agricultural lending? The answer is no, but so we need these community banks."
Inflation is still the concern that the Fed is watching, as they try to keep growth at a slow but sustainable rate.
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