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Most business owners hear "rate hike" and brace for impact. They're looking at it wrong.
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In this installment of the Portus Perspectives series, William follows up on a previous conversation about interest rates and bond prices to tackle the business side of what's happening in the current rate environment.
Inflation has been a persistent issue since 2022 when the Federal Reserve started raising interest rates to bring it under control.
At its peak, inflation was running somewhere between six and eight percent. The causes have been layered.
- Onshoring and nearshoring manufacturing back to the US has driven up building costs.
- The tariffs enacted last year created their own inflationary impact, largely one-time but real.
- And the ongoing conflict in Iran has disrupted oil markets in ways that continue to feed elevated prices.
The Fed has a dual mandate that makes it unique among central banks. It's targeting both low unemployment, theoretically somewhere between four and five percent, and low inflation at a two percent target.
Right now unemployment is right in range. Inflation isn't, so the Fed keeps raising rates to slow consumption and bring prices back in line.
Here's where it gets interesting for business owners.
When the Fed raised short term rates most recently, the expected reaction would have been for long term rates to rise as well.
That's not what happened.
Long term rates actually fell. And that's a meaningful distinction for anyone whose borrowing costs are tied to the ten year Treasury, which includes thirty year mortgages and a wide range of consumer and business loans.
The market is signaling that it believes the Fed is serious about controlling inflation. When inflation expectations come down, long term rates follow.
That's good news for home builders, for borrowers, and for business owners who have been waiting for borrowing costs to come down.
The Fed is doing its part.
The remaining variable is whether Congress and the administration can get spending under control, because that'll drive inflation expectations over the next decade regardless of what the Fed does in the short term.
Key Topics Covered:
- The Inflation Story: What's been driving elevated inflation since 2022 and why it has been slow to come down.
- The Fed's Dual Mandate: Why the Federal Reserve is the only central bank targeting both unemployment and inflation.
- What Happened When the Fed Raised Rates: Why long term rates fell instead of rising and what that means.
- The Ten Year Treasury Connection: How so many business and consumer borrowing rates are tied to this benchmark.
- Inflation Expectations and the Market: Why what the market believes about future inflation matters as much as the rate itself.
- What Business Owners Should Watch: The role of Congress and spending in driving long term inflation expectations.
If you've been watching the Fed raise rates and wondering what it actually means for your borrowing costs and your business, this episode will give you the clearest picture available right now.
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ORIGINAL MEDIA SOURCE(S): William Bissett: Why the Fed Raising Rates Isn't the Bad News Most Business Owners Think | Portus Perspectives
Originally Recorded on September 22, 2026
Portus Perspectives: Episode 53
Chapters:
00:00 Why Business Owners Are Looking at Rate Hikes Wrong
01:00 What's Been Driving Inflation Since 2022
02:00 The Fed's Dual Mandate Explained
03:00 Why Long Term Rates Fell When the Fed Raised Short Term Rates
04:00 What This Means for Business Owners and Borrowing Costs
05:00 What Congress Needs to Do Next
#InterestRates #FederalReserve #Inflation #BusinessOwner #WealthManagement #FinancialPlanning #Entrepreneurship #SmallBusiness #Economy #PortusPerspectives #PortusWealth #Mortgage #BondMarket #MacroEconomics #BusinessFinance
