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2 8 C O M M U N I T Y M A G A Z I N E FA L L 2 0 2 5 data confirm that 10-year real yields re- main above zero. Why does this matter? Positive real rates and a nontrivial term premium will keep borrowing costs for long-duration projects elevated relative to the past decade, even as the policy rate edges down. Credit conditions also remain firm. The Fed's July Senior Loan Officer Opinion Survey reported tighter lend- ing standards and weaker demand for commercial and industrial loans across firm sizes in the second quarter. Banks described standards as sitting on the tighter end of their historical ranges across most categories. Even if the funds rate declines, tight underwriting can keep all-in financing conditions re- strictive, slowing the pass-through of policy easing to the real economy. Manufacturing enters this next phase from a mixed starting point. The August ISM Manufacturing PMI stayed in con- tractionary territory, with the headline index at 48.7 and the production and employment subindices also subdued. Prices paid remain elevated, reflecting ongoing cost pressures in metals and other inputs. That backdrop suggests manufacturers will welcome incremen- tal rate relief, yet they should not plan around a return to ultra-cheap money. What To Do Now Manufacturers should assume a funds rate that settles in the mid-3s over the next two years, with long rates staying positive, and translate that view into a practical rate playbook. Manufactur- ers should predefine explicit triggers for CapEx approvals and refinancings, and pair each trigger with tactics you can execute immediately, such as swap ladders, forward-starting swaps, caps, or collars. Keep term sheets, board ap- provals, and hedge documentation pre- cleared so you can act the moment a favorable window opens. Sequence investments so the early moves strengthen cash generation and resilience, then add capacity only when demand is confirmed through firm or- ders, signed contracts, or clear pipe- line visibility. Focus first on throughput gains, yield improvement, maintenance that reduces downtime, and tighter working capital. With credit standards tight, treat internally generated cash as a strategic resource and recycle it into the highest-certainty returns. Use operating data to fight margin compression by tracking prices paid, order rates, production, and inven- tories at a granular level, then adjust purchasing and pricing in near real time. Apply dynamic pricing and mix man- agement where customers value speed or reliability, and target scrap, rework, and changeover losses to lift yield. Use these signals to time purchases, nego- tiate vendor terms, and protect gross margin while demand remains uneven. The overall takeaway is straightfor- ward. The first cut in September will mark the start of normalization, not a re- turn to an emergency regime. The Fed's own dots, a higher neutral rate, positive real yields, and sticky credit standards all argue for a world where money re- mains more expensive than it was for much of the last decade. Manufacturers that build this into their strategic think- ing will be positioned to grow through a higher-for-longer environment. B I T S & B Y T E S Tariffs are making waves across the electronics industry, and members of the Global Electronics Association are feel- ing the impact. In a blog post, Global Electronics Association leaders Sanjay Huprikar, Sydney Xiao, Lorena Villanueva, and Joe Schneider shared their perspectives on how recent tar- iff announcements are shaping their regions, and what it could mean for the global electronics value chain. "The general sen- timent from most politicians and busi- ness leaders is that evading an all-out transatlantic trade war and achieving predictability and stability in the trade relationship was important in con- tinuing a long-term dialogue on eventu- ally dismantling bar- riers," wrote Sanjay Huprikar, chief global officer. Are Tariffs Terrific or Trouble? That backdrop suggests manufacturers will welcome incremental rate relief, yet they should not plan around a return to ultra-cheap money.