Insider has had a number of readers who have asked about the trend in interest rates and whether they should be concerned.  The short answer is, not yet. The best way to demonstrate this is through two graphs showing the historical changes in both the Federal Funds Rate and the Prime Interest Rate over the last 60 years.

Here are the graphs.

Yes, you should continue to watch the trends in interest rates as we have entered into a time of upwards inflation and the Federal Reserve is focused on raising interest rates as a means to slow inflation in our economy.  However, you can see by the historical trend, we have a ways to go before the sky is falling as we have been in a period of historically low interest rates rates.

If you do want to be proactive, take a look at the relationship  of your total debt to the annual cash flow (earnings before interest, depreciation and amortization)  in your business.  If that number is 5 to 1 or higher, you might look at what you could do to reduce your leverage.  The M&A market is still active and strong.  The sale of non-strategic, but quality assets is a terrific way to generate cash to reduce your debt or redeploy the cash to areas that are more strategic to your operation.

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