DAVE’S VIEW
Greetings:
During the nearly five
years I’ve been with
FCS Financial, the
most frequent question
I’ve been asked is
“what are interest rates
going to do?” Since
we’ve been in a long
period of historically
low interest rates, my
answer generally has
David Janish, CEO
been they were going
to go up…eventually.
I didn’t know when or by how much so this
answer wasn’t very helpful.
However, the economic environment has
changed and interest rates have increased. Since
late 2015, the Federal Reserve has increased the
Fed Funds Rate 6 times. Each increase has “only”
been ¼ of a percent, but cumulatively these
six increases have increased short-term rates by
1.5% over this time. Indications are that these
increases will continue through at least 2019 and
possibly into 2020. The question I’m now being
asked is “how high are rates going to go and for
how much longer?” Unfortunately I can’t answer
that question any more definitively than the
previous question.
FCS Financial, as a member of the Farm
Credit System, gets our funding to make loans
by issuing bonds to investors. The investors in
our bonds demand a competitive rate, so our
short-term rates have similarly increased which
are reflected by the increases many of you have
received on your variable loans.
Longer-term rates, however, are determined
by various market forces including consumer
confidence, inflation expectations, economic
growth and other factors. While longer-term
rates have likewise been at very low levels for a
number of years, now appears to be a good time
to consider locking in some fixed rate financing.
4 HEARTBEAT | SUMMER 2018
In this issue of HeartBeat, Jeff Houts, Executive Vice
President of Operations at FCS Financial, discusses the
benefits of fixed rate financing that I hope is helpful and
timely.
This issue of HeartBeat also includes a list of our
2018 scholarship recipients. An independent group of
judges reviewed more than 100 applications and selected
thirty-five recipients to receive a $1,500 scholarship to
help them pursue their education. Each recipient is a
child or grandchild of an FCS Financial member. After
reading about each of the recipients, I think you’ll agree
this is another impressive group.
Finally, we have just completed our annual director
election cycle. This year, two new board members
were elected to your Board. Glen Cope and Beth
Schnitker will be seated at the June Board meeting.
Glen is from Aurora and represents Area 4 which is
generally southwest Missouri, and Beth from Middleton
represents Area 7, which covers east-central Missouri.
We are excited to have the opportunity to work with
Glen and Beth as we continue our mission to provide
dependable, reliable and affordable financing and related
services to the farmers, ranchers and agribusinesses of
Missouri.
Glen and Beth replace James Nivens and Maurice
Glosemeyer. James served on the FCS Financial Board
for more than 20 y