FCCS News & Insights

S&P Global Delivers Economic Insights

Uncertain interest rates, geopolitical upheaval and ongoing inflation concerns are plaguing Farm Credit lenders needing to maintain portfolio strength while continuing to serve member-owners. Passkey Partner S&P Global provides a path through the confusion with macroeconomic forecasts to help inform lending and risk management strategies and decisions.

“S&P Global provides macroeconomic forecasts so clients can understand the most likely scenarios for interest rates,” says Naomi Levy, Associate Director with S&P Global. “They can then plan for the things like rates impact, liquidity levels, portfolio exposure and credit risk.”

S&P typically produces six off-the-shelf scenarios based on narratives they’re hearing from clients: one or two upside scenarios and four or five downside. For example, it provides a scenario with rates starting to ease in December 2024, another in which rates don’t start dropping until June 2025, and another with rates dropping this September. Clients can then apply the scenario to their own portfolios. S&P can also create a custom scenario for clients considering a specific future state.

“Every organization can use a publicly available source or sources for some of the data we provide, and their staff could formulate projections, but those sources are snapshots providing no track record of consistency over time,” says Naomi. “The depth and breadth of S&P’s analysis yields a much more reliable and robust macroeconomic forecast.”

S&P’s expertise includes numerous vertical sectors, including an entire team focused on agriculture, including commodity prices and production projections. In addition to the economic forecasts and interest rate scenarios, clients can contact these economic experts with questions. Clients can also access S&P’s extensive database, which includes daily updates on 30 economic indicators, and receive regular inside analysis and economic commentary.

S&P has provided economic insights to Farm Credit for more than 30 years through its predecessor organization Global Insight and counts numerous Farm Credit organizations as long-time clients. To gain access to the same level of economic expertise and insight, visit the S&P website.

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