Federal Reserve hikes interest rates
The other day the Feds hiked interest rates to 1.5%. Last month, the Fed held steady at 1.75%. In December it bumped up from 1.375% to just over 2% for the first time since 2008. So, this latest 0.5% increase is a pretty big deal.
The main reason behind this increase is inflation: The Fed wants to keep track of how fast prices are rising. Also, to make sure they stay under control by adjusting interest rates so that businesses have some incentive not to raise prices too much. Which can cause trouble down the line for consumers (too much inflation can result in hyperinflation). Inflation has been running low for years now, but it went down from 2% last year after oil prices fell from their highs during 2018; now that energy costs are back up a bit and wages seem like they’re going up again too (though not as much as we’d want), we’ve gotten closer again (to about 2%).
So far this year inflation has averaged about 2%, which means that if nothing else were happening right now except these price increases then maybe we would expect some kind of rate hike; however, since there’s also growth abroad–not just here but also worldwide–this could affect things too! In any case what this means is that despite lower unemployment numbers coming out regularly across America there hasn’t really been any movement on wages yet because employers weren’t anticipating having more money available until they knew what would happen with tariffs between China and America…which seems like it might still be a while before those come into effect anyway…
How interest rate hike can hurt your online business
Since the feds hiked interest rates, the cost of borrowing goes up. This means that small business owners have to pay more for loans and other forms of financing. For example, if you have a mortgage on your home and rates rise by 1%, it’ll cost you $100 more each month in payments. On top of that, if small businesses are forced to cut back on hiring or lay off employees due to higher costs brought about by higher interest rates, it can make it even harder for them to get ahead in their industry—and the economy as a whole suffers further from this decrease in spending power among working Americans.
Hire a good tax professional
A good tax professional will help you find all the deductions and credits that are available to you. Your business is probably eligible for a lot of different tax breaks that you may not know about or be able to take advantage of on your own. There are also certain expenses that can only be deducted if they’re done through a professional, like paying someone to help with your taxes or using software to file them.
If your business is growing and making more money each year, it’s time to start looking into hiring a professional who can help with your taxes. The costs associated with hiring an accountant or bookkeeper can add up quickly. For services like bookkeeping and preparing quarterly reports (which are required by law), but it could end up saving you thousands over the course of several years—not only by providing accurate figures on what deductions are available but also by calculating how much state income tax should be withheld from employee paychecks each month so they don’t have unexpectedly large bills at year’s end.
Start thinking about new ways to increase revenue for your business
Now that you know the interest rates have gone up because the feds hiked interest rates; you need to start thinking about new ways to increase revenue for your business. You should consider all the ways you can make your business more profitable.
First, think about how you can generate more revenue. Second, consider new business ideas or expanding your current one with new products or services. Finally, if none of those seem like a good fit for what your company does right now then brainstorming is always an option!
One example of a potential new idea would be starting an online tutoring service where students pay an hourly rate for private lessons. Such as, with teachers who specialize in their subject matter area like math tutors helping students improve their grades at school without having them attend class all day long every single day just because they don’t understand certain concepts taught by teachers during class hours which really defeats purpose
Get a side hustle
You may be thinking, “I can’t just quit my job and start a side hustle. It would be irresponsible to leave the security of my full-time income.” But if you really want to save money, consider starting a side hustle as an opportunity to learn new skills or pursue a passion that might otherwise be impossible for you without the extra cash. Maybe it will even help you decide if your current career path is right for you—or perhaps it will help get you promoted at work.
You should be prepared for this increase, and it’s better to do things early rather than later. The cost of borrowing money will go up, and that means those who have outstanding loans will see their monthly payments increase.
Hiring a good tax professional is also something to consider. Especially if you are looking for ways to offset the increased interest rates. Now since the Feds hiked interest rates, a good tax professional can help you take advantage of any deductions. They can even find tax breaks available to small businesses such as yourself.
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