MARCY PARK. THE FEDERAL RESERVE HOLDING INTEREST RATES STEADY NOW FOR ABOUT EIGHT MONTHS, BUT THAT COULD SOON CHANGE. FED CHAIR JEROME POWELL HINTING AT A CUT DURING A SPEECH YESTERDAY. THE TRUMP ADMINISTRATION HAS BEEN CALLING FOR INTEREST RATE CUTS AND IS CRITICIZING POWELL AND THE FEDS FOR MONTHS. LOCAL ECONOMISTS SAY A RATE CUT WOULD BE BENEFICIAL TO NEW MEXICO’S ECONOMY. NOW, IF THE FED DOES INDEED CUT RATES IN SEPTEMBER, IT COULD POTENTIALLY LEAD TO A SERIES OF THINGS THAT HELPS REDUCE BORROWING COSTS ACROSS THE STATE. NEW MEXICO’S RECENT BUDGETS FOR THINGS LIKE INFRASTRUCTURE IMPROVEMENT AND NEW EDUCATIONAL FACILITIES, AFFORDABLE HOUSING CAN SEE COST SAVINGS, ALLOWING THE DOLLARS TO STRETCH FURTHER. THE FED DETERMINES ONE RATE THAT’S OVERNIGHT LENDING TO BIG BANKS. NEW MEXICO. WE’RE A LOW INCOME STATE. WE TEND TO HAVE WORKERS WHO HAVE. WHO ARE LESS WELL SKILLED, LESS WELL EDUCATED, WHO TEND TO HAVE LESS JOB SECURITY. AND SO WHEN THERE IS A RECESSION, THEY TEND TO BE THE FIRST ONES LAID OFF. AND FOR THAT REASON, I THINK IT’S MORE IT PROBABLY IS TO NEW MEXICO’S BENEFIT TO HAVE TO HAVE THE THE INTEREST RATES CUTS OCCUR. WELL, DURING HIS SPEECH YESTERDAY, POWELL REAFFIRMED FEDERAL OFFICIALS WILL MAKE
Possible rate cuts could help New Mexico business
Fed chair Jerome Powell hinted that a rate reduction is coming in September
Updated: 12:55 PM MDT Aug 25, 2025
The high cost of living might have a silver lining for New Mexicans if the Federal Reserve Bank lowers its interest rate next month.In a speech last week, Fed chair Jerome Powell hinted that a reduction in the rate big banks will pay for overnight lending could be announced in September, and economists from the University of New Mexico and New Mexico State University said if that happens, it could be good news for this state and its residents.The Federal Reserve interest rate is what banks are charged for overnight lending, but it also affects the cost of credit cards, mortgages, and federal, state, county and municipal government spending.”It could potentially lead to a series of things that help reduce borrowing costs across the state,” said Reilly White, UNM economist. “New Mexico’s recent budget for things like infrastructure improvement, new education facilities, affordable housing, could see cost-saving, allowing the dollar to stretch further.”NMSU economist Chris Erickson said that a rate cut could make a recession less likely. “We’re a low-income state,” Erickson said. “We trend to have workers who are less well-skilled, less well-educated, and have less job security, and when there is a recession, they tend to be the first ones laid off. For that reason, I think it’s probably to New Mexico’s benefit to have the interest rate cut occur.”
The high cost of living might have a silver lining for New Mexicans if the Federal Reserve Bank lowers its interest rate next month.
In a speech last week, Fed chair Jerome Powell hinted that a reduction in the rate big banks will pay for overnight lending could be announced in September, and economists from the University of New Mexico and New Mexico State University said if that happens, it could be good news for this state and its residents.
The Federal Reserve interest rate is what banks are charged for overnight lending, but it also affects the cost of credit cards, mortgages, and federal, state, county and municipal government spending.
“It could potentially lead to a series of things that help reduce borrowing costs across the state,” said Reilly White, UNM economist. “New Mexico’s recent budget for things like infrastructure improvement, new education facilities, affordable housing, could see cost-saving, allowing the dollar to stretch further.”
NMSU economist Chris Erickson said that a rate cut could make a recession less likely.
“We’re a low-income state,” Erickson said. “We trend to have workers who are less well-skilled, less well-educated, and have less job security, and when there is a recession, they tend to be the first ones laid off. For that reason, I think it’s probably to New Mexico’s benefit to have the interest rate cut occur.”