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Almost half of rural bankers recently surveyed in the Midwest and Plains region want two Federal Reserve rate cuts before the end of the year, and a leading economist thinks they'll get their wish.

About 48% of bankers who took part in Creighton University's Rural Mainstreet survey in July advocated for two rate cuts of one-quarter percentage point or one-half percentage point.

The nation is 鈥渁t a major crossroads between risking the creation of a major recession by keeping interest rates in this range too long just to reach a target inflation number," said Don Reynolds, chair of Regional Missouri Bank in Marceline, Missouri.

Creighton economist Ernie Goss, who oversees the monthly survey as well as the monthly Mid-America Business Conditions survey, said the wholesale price gauge in the latter survey fell in July to a level indicating cooling inflationary pressures.

鈥淭his is the fifth straight month that the inflation gauge has fallen," he said. "The regional inflation yardstick has clearly declined into a range indicating inflationary pressures moving toward the Federal Reserve鈥檚 target for the second half of 2024. As a result, I expect the Fed to cut interest rates two times in the remaining months of 2024.鈥�

The Federal Reserve System's Federal Open Market Committee next meets Sept. 17-18.

The two Creighton surveys serve as leading indicators of economic conditions in the Midwest and Plains region.

The Rural Mainstreet Index is based on a survey of rural bankers in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming. It focuses on about 200 rural communities with an average population of 1,300 people.

Its overall index in July sank below growth-neutral for an 11th straight month, to 41.3 from 41.7 in June and 44.2 in May. Any readings above 50 on the index that ranges from 0 to 100 suggests economic growth in the months ahead, with readings below 50 indicating decline. Goss cited weak agriculture commodity prices, sinking agriculture equipment sales and declining farm exports for July's number.

The Mid-America study surveys supply managers in Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. Its overall index in July was above growth neutral for the fourth time this year, but it declined slightly to 50.7 from June's 51.3.

鈥淭he overall index, much like the U.S. reading, has vacillated around growth neutral since December of 2023," Goss said. "Additionally, supply managers remained pessimistic regarding the 2024 outlook, with only 11% expecting growth for the rest of 2024.鈥�

The Mid-America survey's business confidence index, which looks ahead six months, slumped to 30.6 from June鈥檚 34.2.

The Rural Mainstreet confidence index fell to 28.3, down from June's 29.2 and its lowest level this year.

The full Creighton reports can be found at bit.ly/3Y0SedN and bit.ly/3SavggB.

漏2024 The Bismarck Tribune. Distributed by Tribune Content Agency, LLC.