Powell’s Jackson Hole Pivot: A Possible September Rate Cut
At the Federal Reserve’s Jackson Hole symposium last week, Chair Jerome Powell suggested that the Fed may begin easing rates as early as the September 2025 meeting. His remarks pointed to slowing job growth and a cooling economy, indicating that the time may be approaching for a shift in policy. Markets quickly priced in this possibility, with analysts now assigning a strong probability to an initial cut this fall.
This matters because interest rate cuts and business valuation are closely connected. For the past two years, higher borrowing costs have slowed private market activity, making acquisitions and sales harder to finance. A reversal in policy could unlock liquidity and create one of the most favorable selling environments business owners have seen in years.
Unlocking Private Markets: How Rate Cuts Fuel Deal Activity
When interest rates rise, the private market often freezes. Buyers struggle to justify higher borrowing costs, private equity holds back capital, and even strategic buyers become cautious. This has been the story since the Fed began raising rates aggressively—deal activity slowed, multiples compressed, and financing became harder to secure.
The flip side is also true: lower rates revive deal flow. As borrowing becomes cheaper, debt-financed acquisitions become feasible again. That means private equity groups, family offices, and independent sponsors are more likely to compete for businesses on the market. For sellers, this creates a virtuous cycle—more active buyers, greater liquidity, and potentially stronger valuations.
This dynamic is at the heart of how interest rate cuts and business valuation interlink. When financing costs fall, buyers can afford to pay higher multiples without straining returns, and sellers benefit from renewed demand.
Why This Could Be Prime Time for Owners to Sell
Lower rates affect valuation in more ways than one. First, they reduce discount rates in valuation models, meaning that a company’s future earnings are worth more in present terms. Second, they make buyers more aggressive, since capital is easier to access. For main street and lower-middle-market owners, this can translate directly into higher offers.
According to small business transaction data, many owners believe that high rates have weighed heavily on valuations over the last two years. If Powell follows through on his signals, interest rate cuts and business valuation may align to create a window where both the math and the market are favorable to sellers.
For owners who have been waiting for the right time, this may be it. A potential Fed pivot could mean not only renewed activity in private markets but also higher multiples, especially for businesses with strong earnings and clean financials.
Private Market Liquidity: What Sellers Should Know
One of the most immediate effects of lower rates is the unlocking of private market liquidity. During periods of high interest rates, many private equity firms and family offices pull back on acquisitions, preferring to wait until financing costs are more favorable. Strategic buyers—larger businesses acquiring smaller competitors—also become cautious, since higher rates make growth through acquisition less attractive.
If the Fed begins easing, capital that has been sitting on the sidelines will look for opportunities. Private equity firms with unspent “dry powder” will re-enter the market aggressively, searching for quality businesses. This surge in liquidity creates competition among buyers, and competition drives price. For owners, this could mean multiple offers instead of one, and better deal terms instead of concessions.
For main street and lower-middle-market owners, this is a reminder that interest rate cuts and business valuation go hand in hand. A more liquid private market means stronger demand for well-prepared businesses.
Strategic Moves for Owners in This Window
Timing is everything in a transaction. With Powell signaling a potential pivot, owners who are considering a sale should start preparing now. That preparation includes:
- Obtaining a professional valuation: Understanding where your business stands today allows you to benchmark improvements and prepare for buyer scrutiny.
- Cleaning up financials: Transparent, accurate, and timely financial statements will give buyers confidence.
- Highlighting profitability drivers: Since valuations are built on cash flow, owners should emphasize the stability and growth of their earnings.
- Strengthening operations: Demonstrating efficient systems and a capable management team makes a business more attractive.
If interest rate cuts materialize, the businesses that are already prepared will be the first to benefit from the renewed buyer demand. Those who wait may find themselves competing with a flood of other sellers trying to take advantage of the same conditions.
CGK Business Sales’ Perspective
At CGK Business Sales, we’ve seen firsthand how shifts in interest rates ripple through private markets. Our role is to help owners position themselves to capture value when the environment turns favorable. That means not only understanding the connection between interest rate cuts and business valuation but also guiding owners on how to highlight their strengths to buyers.
We take a data-driven approach to valuation, carefully considering your financial performance, industry trends, and the broader capital markets environment. More importantly, we help package your business in a way that resonates with buyers who are re-entering the market as liquidity returns. Whether you’re ready to sell now or simply want to know your options, our team ensures you’re prepared for what comes next.
Timing and Preparation Matter
For business owners, the window created by a Fed rate cut cycle could be one of the best opportunities in a decade. Lower financing costs, renewed buyer competition, and higher valuations all favor sellers who are ready to act. But timing is critical—owners who prepare early have the advantage.
If you’ve been waiting for the right moment to explore a sale, now is the time to start the conversation. At CGK Business Sales, we can provide you with a confidential valuation, guide you through the preparation process, and help you determine whether this is the right moment to maximize your outcome.
In a market where interest rate cuts and business valuation are about to align, preparedness is your greatest asset. Don’t wait until the window has already opened—start preparing today.
