Economy slowing, but Fed will likely try to help, Goss says

The economy appears to be slowing, according to the latest survey from Creighton University.

“Nine of ten Bank CEOs indicated that the tariffs are either having a negative impact or will have a negative impact on their local economy,” said economist Ernie Goss. “That’s up from eight of ten when we asked the same question last September. The tariffs are really beginning to cut into the rural Main Street economy. That’s true for Kansas, as well.”

Kansas part of the Rural Mainstreet Index released Thursday was below growth neutral in July at 49.0.

“Kansas depends heavily on exports, urban and rural areas, small manufacturing for the rural areas, of course, agriculture is very important, exporting of agricultural goods from Kansas,” said Goss. “That’s where we’ve seen a lot of the action. There is some support coming out of the administration to offset what’s going on in China, or rather, what’s not going on in China.”

Goss believes a cut in short-term interest rates will happen soon.

“That will be announced on July 31,” Goss said. “I’d be very surprised if there’s not a rate cut. If they’re not going to do that, they need to be talking and talking fast, because the market has baked it in. They’ve baked in a rate cut of at least a quarter-percent.”

Right now long-term interest rates are lower than short-term, but if the Fed loosens its policy with a rate cut, that could help to stimulate the economy again.