Prolong
proh-lawng
to make something last a longer time
from Latin pro "forth" + longus "long"
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TIP OF THE WEEK
A continuing resolution prolongs funding the federal
government through November 17, 2023.
Then another continuing resolution or a full year funding
package will need to be passed or the government will profligately go
procumbent.
There is also a propitious promulgation that now the
guarantee fee for SBA 7(a) loans of $1,000,000 or less is 0.00%.
For loans over $2,000,000 the State Small Business Credit
Initiative (SSBCI) and State Small Business Loan Guarantee Program offers a
higher percent of guarantee and a lower guarantee fee.
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Indices:
PRIME RATE= 8.50%
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SBA 504 Loan Debenture Rate for September
For 20 year debentures, the debenture rate is only 5.39%
but note rate is 5.466% and the effective yield is 6.867%.
For 25 year debentures, the debenture rate is only 5.41%
but note rate is 5.464% and the effective yield is 6.812%.
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AHEAD OF THE YIELD CURVE
The Federal Reserve protended interest rates at the fed
funds target rate range at 5.25 percent to 5.50 percent.
The Federal Reserve description of economic conditions
was described as "solid" which was an upgrade from
"moderate" in their previous release on monetary policy.
Job gains are downgraded slightly as "slowed"
but remaining "strong".
Employment for the month of September will be released on
Friday.
Keep your eyes and ears open for the Federal Reserve
release on Industrial Production and Capacity Utilization.
The Federal Reserve watches manufacturing closely. One of the Federal Reserve’s preferred
measures of inflation is the capacity utilization rate.
Normally the Fed is concerned about inflationary
pressures when the capacity utilization rate is about 82%.
Here is what capacity utilization has been doing and this
week interesting little table of data:
2007- 81.5
2008- 79.9
2009- 66.9
2010- 74.8
2011- 76.7
2012- 79.0
2013- 77.8
2014- 78.8
2015- 76.5
2016- 75.4
2017- 76.2
2018- 78.5
2019- 79.7
2020- 74.5
2021- 76.4
2022- 80.0
2023- 79.7
What does all this mean?
I don’t know.
Last month capacity utilization moved up to 79.7 percent,
in line with its long-run (1972–2022) average.
Durables manufacturing nearly ¾ of all manufacturing is
up 0.1 percent in August with some small gains nearly offset by a 5.0 percent
drop in motor vehicles production.
The Federal Reserve does not meet again on monetary
policy until Halloween.
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OFF BASE
This weekend is prolonged! A three day weekend comes up thanks to
Columbus Day on October 9th.
Columbus Day is an official Federal holiday recognized by
the Federal Reserve.
Originally celebrated on October 12th to celebrate
Columbus’s arrival in the Americas on October 12th, 1492, the Uniform Monday
Holiday Act moved permanently to a Monday Washington's Birthday, Memorial Day
and Columbus Day as federal holidays.
As a result, Columbus Day is always celebrated on the
second Monday in October.
