The Fed Rate Cut: A Tailwind for Private Equity in the Lower Middle Market

The Federal Reserve last week cut its benchmark interest rate by 25 basis points, lowering the federal funds rate to a range of 4%–4.25%. This move — the first since December 2024 — signals a shift toward monetary easing amid a softening labor market and persistent inflation.

Why the Fed rate cut matters for private equity

The rate cut is particularly impactful for private equity (PE) firms operating in the lower middle market, where deal economics are more sensitive to borrowing costs and capital availability. Here’s how: READ MORE