By Michael Briggin
At the upcoming September 17-18 policy meeting, the Federal Reserve is set to meet to discuss the first interest rate reduction. This means that the economy is likely going to start adjusting back to normal after inflation being a factor to everything for years.
Here’s what your organization should prepare for when the Fed starts beginning to cut interest rates:
Recession or No Recession?
There are no signs we are heading towards a recession just yet but if the Federal Reserve keeps its word about cutting the interest rates, it’s likely not going to happen just yet.
One interest rate cut won’t likely adversely affect the economy. However, if too many cuts happen in a short time span, then the economy won’t benefit as much.
Your Customers Spending Habits
Although there’s been increases in spending during and after the COVID-19 pandemic, the persistent inflation that was pervasive for years has been cooling for some time. This means that consumers have been feeling the pitch in their pocketbook and are finally going to get relief.
Continue to offer cost incentive pricing for your products even if interest rates will likely drop. In general, the cost of products and services can potentially drop below the persistent inflation-driven prices but customers will likely still opt to save more than spending.
Preparing To Serve Customers
Nothing much should change here but if you haven’t already done so, consider digitally optimizing your organization’s operations in serving customers.
Chatbots remain to be the most effective form of customer service automation tools and can help your customers regardless of what economy you’re facing. Also, pay close attention to your customer journey and ensure that your SEO and website are both enhanced so that your customers know where to find you.
How Your Hiring Could Change
While an interest rate cut will start to make things easier for your customers, it’s best to still err on the side of caution when planning for hiring. A mistake many companies, especially those in the technology sector, was to hire aggressively because the economy was growing during the COVID-19 pandemic.
As a result, in recent months there have been layoffs after layoffs. This is in light of inflation being high and interest rates being higher than they’ve normally been in the past.
If hiring, make sure there are good reasons for the hiring and not because your organization has to scale up fast just because hype and funding dictate it.
