Fed Raises Rates for First Time Since 2023, Repricing Supply-Chain Capital - ARC Advisory

The Federal Reserve’s first rate increase since July 2023 raises the cost of capital across supply-chain operations. Higher borrowing costs affect inventory, warehouses, fleet expansion, automation, supplier capacity, and network investments, increasing the hurdle rate for projects that depend on financed assets or working capital. For supply-chain leaders, the issue is less whether investment stops than whether each investment can justify the capital it consumes. Safety stock must provide sufficient resilience, automation must deliver measurable productivity, fleet expansion must be supported by utilization, and new capacity must generate enough service or cost advantage.