SIOUX FALLS, S.D. (KELO AM) - Speculation is that the Federal Reserve will hike the prime rate next month from the current 3.5%, a level that's over a year old.
President of the South Dakota Banker's Association Curt Everson says most banks have expected an increase.
Everson says banks are poised to "limit their interest rate risk exposure both on the loan side and on the security and investments side."
Everson says a hike in the prime impacts mortgage and consumer loans.
He says the country has enjoyed a long time, low rate environment that's been really good if you're trying to finance a home or finance a business.
It may not be the best time to raise rates with a lagging farm economy. But Everson says interest costs are not usually a major expense to most businesses and farmers.
Still, Everson says, how sensitive businesses are to potential rate hikes is not something he can say.
Other economists predict more rate hikes next year.
