May 3, 2024

Holding Steady

Holding Steady

The Fed decided this week to keep interest rates unchanged at the highest level in more than 10 years, noting there hasn’t been sufficient progress toward the central bank’s goal of reducing inflation to 2%.

The good news is the Fed said a rate hike is unlikely. While many indicators are positive—economic activity has continued to grow at a steady pace, unemployment has remained low, and job gains are strong—borrowing will continue to be expensive for both businesses and individuals for the foreseeable future. That will likely drive down demand.

While many leaders won’t welcome a slowing in demand, business cycles are part of life, and it’s always possible to thrive in any business climate if you have the right strategy in place. Sometimes, that requires very creative thinking and a willingness to be very nimble, but that’s the name of the game.

The winners in this environment will clearly be businesses that take high interest rates and inflation into account as they form their strategies for Q3, Q4, and beyond. Both consumers and businesses will remain under pressure from the high cost of basics such as food, energy and real estate for the foreseeable future. Those who can offer solutions, like private label food—or fun ways to escape—will be in demand.

There are also opportunities for growth through mergers & acquisitions. Here at Marcum, we announced this week that Simon, Krowitz, Meadows & Bortnick (SKMB) has joined our Firm. Founded in 1959 and headquartered in Rockville, Maryland, SKMB is known for an outstanding reputation for delivering tailored financial solutions and building strong client relationships. We are delighted to welcome our newest team members, who will enhance our assurance, tax and accounting practices and add to our business valuation and litigation services.

Stay tuned early next week for another growth announcement.

Entrepreneurs see opportunities when others don’t, and many of the best-known companies in the U.S. were started during challenging times. Bill Gates started Microsoft in 1975, when the country was in a recession and unemployment was nearly 7%. Method cleaning products, launched during a recession, broke into Target stores in the early 2000s. Airbnb, founded in 2007, took shape during the market collapse that followed not long after that. And the fintech firm Venmo was founded in 2009 during the Great Recession.

Fortunately, technology to help businesses operate more efficiently keeps getting better and better. As Marcum’s 2024 Patent Litigation Study shows, the number of patents granted annually continues to rise, and much of the innovation is coming from the tech sector or from firms in other industries that are embracing tech. As I’ve mentioned in past columns, we’ve done a deep dive into AI and recently rolled out the commercialized version of to other firms. And there will be a lot more innovation ahead.

Speaking of escape, this Saturday will mark the 150th anniversary of the Kentucky Derby and for many an excuse to sip mint juleps when post time arrives at 6:57 p.m.—whether that’s at home on TV or at Churchill Downs. Guests and fans can buy $5,000 mint juleps with Woodward Reserve bourbon in gold cups as part of a charitable benefit. It’s the longest continuously running sporting event in the U.S.— and one that’s never been cancelled. It’s a great example of staying power that offers inspiration to anyone who hopes to build a business that stands the test of time.