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| Prime Rate Prediction |
Prime Rate Forecast
As of right now, our odds are at 90% (likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at the current 3.50% - 3.75% at the March 18TH, 2026 monetary policy meeting, which would leave the United States Prime Rate at 6.75%.
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Made In The USA
"...Economic activity in the manufacturing sector expanded in January for the first time in 12 months, preceded by 26 straight months of contraction..."
Great news, yes?
Well, I think the comments from American manufacturers tell the real story, so, here you go: ⏬
The Following Is A Sampling Of Quotes
From A Diverse Pool Of U.S. Manufacturers:
-
' ‘Hope’ has been word of the year in the Transportation Equipment
industry. Unfortunately, all the hope in the world has not materialized
into order activity in 2025 or the first half of 2026. Across the
board, buyers continue to stand on the sidelines. As we enter 2026,
every conversation revolves around hope that the second half of 2026
starts the turnaround. It’s hard to set strategy on hope, but thanks to
the uncertainty brought about by this administration, here we are.'
[Transportation Equipment]
- 'Although our volume is low at the moment, the impact on the latest tariff threats
on the European Union will have a huge negative impact on our profit
for current quoted orders. We will not be able to recover the increase tariffs in our current quotations.'
[Machinery]
-
'Continuing softness in the market, with December orders below
average and buyers reluctant to spend despite beneficial tax policies in
the U.S. Geopolitical tensions are fueling ‘anti-American’ buyer sentiment, and sales are being lost.'
[Machinery]
- 'Another round of emotionally charged tariffs
seems imminent, changing the landscape once more. Movement of custom
product out of China continues, but the progress is slow with new
qualifications required for transitioned materials and assemblies.'
[Computer & Electronic Products]
- 'Business conditions remain uncertain. Customers are cautious. Broad-based inflation continues. The Supreme Court tariff decision looms.' [Computer & Electronic Products]
- 'Growing construction markets, data centers and energy projects, are straining the contract labor availability. The trade tariff uncertainty is creating volatility in the supply chain.'
[Food, Beverage & Tobacco Products]
- 'A new year, with new challenges. We are moving manufacturing from China to Mexico -- which will now impose tariffs on parts made in China. This push for more of a Mexican supply chain and creates some short-term supply management concerns.'
[Chemical Products]
- 'Confused and uninformed tariff policies
continue to plague small companies, making long-term planning
pointless. Companies are not making capital commitments beyond 30 days.'
[Fabricated Metal Products]
- 'Business conditions remain soft as we continue to miss sales, orders and profits as result of increased costs from tariffs, continued fallout from the government shutdown, and increased global uncertainty.'
[Miscellaneous Manufacturing]
-
'Business trends moving into 2026 feature many of the headwinds from
the third and fourth quarters of 2025. While the ‘plane’ has steadied,
there continues to be uncertainty and added costs through our global
operations.
Tariff impacts on our financial performance last year cannot be overstated,
as we had a much smaller EBITDA (earnings before interest, taxes,
depreciation and amortization) than previous years. While other inflationary pressures continue to hit the business, tariffs and product costs played a large role. This
year, we will continue our multi-country sourcing approach to
manufacture and import product from more tariff-friendly countries
outside of China.
But as we know, nothing is guaranteed with
the current administration. We have trimmed costs everywhere inside the
business, including on labor
and conferences, and reduced our revenue forecast to a much more
achievable mark. We’re prepared to battle throughout the year for higher
profitability.'
[Apparel, Leather & Allied Products]
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CHART: ISM Manufacturing Index
January 2026 Update
Stay tuned...
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SUMMARY
- Current odds the U.S. Prime Rate will remain at 6.75% after the March 18TH, 2026 FOMC monetary policy meeting: 90% (likely.)
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Labels: banking, banks, disinflation, fed_funds_target_rate, Fed_Prime_Rate, FedPrimeRate, FedPrimeRate.com, inflation, money, prime_rate, prime_rate_forecast, prime_rate_prediction, tariff_war, tariffs, Trade, Trade_Policy, Trump_Tariffs
