Banker Roundtable at Greater Bemidji’s LaunchPad Gives Insight into Interest Rates

Greater Bemidji’s LaunchPad program hosted a special banking roundtable on Wednesday, where the panel of four local bankers in the Bemidji area discussed the “New Era of Higher Interest Rates” and how it impacts the business landscape between bankers and business owners.

At the LaunchPad’s monthly speaker panel, bankers gave a talk that small business owners and entrepreneurs alike could take valuable information from.

“We’ve got four local bankers here, and we’re going to be talking about the interest rate environment and how to come out ahead if we do end up having a recession once rates start to drop,” said LaunchPad director Brian Huch.

One banker’s look from an optimistic viewpoint is that interest rates could start to plateau.

“Hopefully, this is going to be a short-term deal,” said Kurt Knott, RiverWood Bank Branch President. “You know, I’m not a rate expert by any means nor pretend to be. Right now, indications kind of are that rates are going to hold steady for, you know, maybe 2024.”

By raising rates, the higher cost of borrowing may slow down spending. The Federal Reserve does this to combat inflation. If the rates change too fast and too much, there could be dire consequences.

“To try to delicately balance that, they do so a prolonged period of time, enough to manage what inflation is to get to the goal of 2%,” said Carl Johnson, Security Bank USA Senior VP of Business Banking. “And then they hopefully start to ratchet that back down so as to avoid a recession.”

A recession is a term that can put fear into the consumer, but the panel believes that the Bemidji economy can be more adept at handling a recession than other larger economies.

“Bemidji, I think in general, is an isolated area where we are a little bit away from some of boom-and-bust economy,” said Ultima Bank Vice President Jordan Anderson, “And then we also have a lot of growth along with something Greater Bemidji, the Chamber have been working to try to get into this area, if some of those growth things come into this area during a time of recession … I think that’s going to help push Bemidji through that faster.”

Another key takeaway was the importance of community banks, which feed back into the local economy and know the members of the community inside and out.

“Our bank is only in Bemidji. I have 120 employees. Those are employees shop and and purchase things in Bemidji,” said Hugh Welle, First National Bank Bemidji President. “And so, my employees are aware of who we have as business customers. And so that patronage is something that you won’t get from a national lender because they’re headquartered somewhere else.

To learn more about the next speaker panel at LaunchPad, you can email [email protected].