With interest rates unchanged, small businesses continue to struggle: "I can't grow my business"
Americans across the country are grappling with the repercussions of sustained high interest rates, which have been hovering just over 5% since July – the highest in decades. The Federal Reserve's decision Wednesday to keep rates steady signals continued challenges for those looking to borrow.
Small businesses, often described as the backbone of the economy, are among the hardest hit. Denise Duncan, owner of A T Industrial Products in Pomona, California, which specializes in metal dust collection, said high interest rates have stopped her from taking out a loan to expand and meet demand for her products.
"I can't grow my business and I can't hire people or relocate to a bigger facility," she said. "Here, as a small business owner, I think gas, trash, my utilities have all gone up. My insurances have gone up by 22%."
Federal Reserve Chair Jerome Powell said the battle against inflation is far from over, and on Wednesday, the Federal Reserve announced it would keep interest rates unchanged, leaving them at the highest level in 22 years.
"The full effects of our tightening have yet to be felt today," Powell said. "Given how far we have come along with the uncertainties and risks we face, the Committee is proceeding carefully."
Despite a robust job market and strong consumer spending, the Federal Reserve is not considering lowering rates. Experts from Goldman Sachs think small businesses will have to spend about 7% of what they earn on interest payments next year, up from nearly 6% in 2021.
The Federal Reserve has also signaled it will keep rates higher for longer than expected, with the possibility of another increase on the horizon this December.
For Duncan, this means she faces tough choices to keep her business going.
"You got to raise prices, which makes me even less competitive, and the other thing I think that most people don't understand is if I can't pay the rent or the utility or make payroll, I will ... do without the paycheck," said Duncan.
"There's a lot of mornings I don't want to get up," she said. "We have everything on the line every day."
Jo Ling KentJo Ling Kent is a senior business and technology correspondent for CBS News.
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