The Real Economy: Volume 74

Inflation-adjusted interest rates, investment and the middle market


Authored by RSM US LLP

Download The Real Economy Vol. 74

A confluence of events and policy shifts has coalesced into a unique opportunity for middle market firms to make long-term strategic investments in their businesses. Interest rates, once adjusted for inflation, reside in negative terrain. This implies that firms should take advantage of those historically low borrowing costs to increase productivity-enhancing investment to prepare for the intense competition that will characterize the post-pandemic economy.

In that economy, it will be necessary for businesses to pull forward investments in software, equipment and intellectual property that would have occurred over the decade into the next 12 to 24 months to prepare for the reopening of the $21.7 trillion U.S. economy and the global supply chains that support it. The potential return on investment amid real negative interest rates demands that middle market businesses act boldly and decisively to integrate advanced technologies into the production of goods and provision of services to prepare for what will be a very different economic and financial landscape than before the pandemic.

In this month’s The Real Economy, we examine this important time for middle market businesses to strategically invest, forecasted economic growth, the next round of anticipated fiscal aid, Biden’s tax plan, OPEC’s response to demand drop, as well as health care and life sciences deal flow. Download the full report.