From the Editor's Desk

Business Owners Cautiously Optimistic After Rate Cut

How will last week's interest rate cut likely influence founders' plans to grow their businesses? Two new polls indicate that many entrepreneurs viewed the Federal Reserve's widely expected reduction as a catalyst for reviving investment projects they delayed while borrowing costs remained high. Most owners, however, said they'll keep waiting for additional proof that inflation won't take off again—and push rates back up—before borrowing to finance expansion.

That cautious optimism was the main finding in polls by CNBC/SurveyMonkey and executive coaching company Vistage that sounded out over 2,000 small business owners. Both questioned participants just days before the Fed announced its half-percentage point decrease in the prime rate last week. Overall, respondents were pleased at the prospect of falling borrowing costs, and were eager to take advantage of cheaper financing to grow their companies. But after three years of punishing inflation, many said they still want to be sure prices don't start rising again before committing to loans.


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