What the Fed? Mike Smith Reviews Aircraft Finance Rates

It’s clear the year-end push is upon us. If you’re considering financing an airplane acquisition by December 31st, I recommend starting the process—soon. 

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While every financial institution has a different process and timeline, it doesn’t hurt to engage early to ensure funding by year-end. 

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Remember, financing is a team effort between bank and borrower. Approach the application process with a collaborative mindset for the best outcome. 

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What the Fed: A Look at Market Conditions

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On November 7, the U.S. Federal Reserve lowered its target rate by 0.25%. However, it  doesn't mean that longer-term rates (e.g., aircraft finance rates) will drop. As of November 8, the 10-year treasury sits at 4.32%. That’s 0.11% higher than what was quoted in my article on October 21.

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Going forward, I’ll continue to reference the 10-year treasury monthly as an indication of general rate trends. That said, aircraft finance rates don’t exactly match the 10-year treasury. It’s merely a benchmark to gauge rate movements on loans across the board. 

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With the continued rise in the 10-year treasury, the phrase “higher for longer” is a topic of conversation. While it’s too early to predict 2025 trends, the current rates seen today on longer-term loans may persist. This will be something to keep an eye on as you finish out the year and plan for 2025. 

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