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Diane Swonk: Insights for Business Owners in Uncertain Times

On September 8, 2025, the Grand Rapids Economic Club welcomed economist Diane Swonk, who delivered timely insights for today’s unpredictable business climate. A trusted voice who regularly briefs the Federal Reserve, advises the U.S. Chamber of Commerce, and contributes expert commentary to CNBC, MSNBC, The New York Times, and The Washington Post, Swonk brought clarity amid uncertainty. Her perspective offered both a candid reality check and practical guidance, equipping business leaders with the confidence and direction needed to face the challenges ahead.For business owners, her insights couldn’t be more relevant. The economy, much like the seasons, is always shifting—and right now we’re in a period of uncertainty that rivals, and in some ways exceeds, the pandemic years. Understandably, many companies are cautious about making major moves, from hiring to expansion. Update 🔑 Key Takeaways for Business OwnersStubborn InflationSwonk predicts that inflation will linger at around 3% this fall—persistently above the Fed's 2% target. The result? Operating costs remain high, margins get squeezed, and cash management becomes more critical than ever.Customers Feel Prices, Not Statistics Consumers don’t think in percentages—they feel the reality of higher prices. For businesses serving middle-income households, this means demand for non-essentials may soften while essentials hold steady. Recognizing these shifts can help in pricing and product strategy.Tariffs Are Driving Up Costs With tariffs squeezing profit margins, businesses will need to track expenses closely, consider supply chain alternatives, and evaluate pricing models to maintain profitability without alienating customers.Spending Habits Are ShiftingVacation spending dropped nearly 50% in August, while insurance premiums continue to climb. For business owners, this signals a shift toward more cautious consumer behavior, with a greater focus on value, and increasing household financial stress—all of which affect purchasing decisions.Why This Matters for Business LeadersDiane closed with words that resonated with me:“I hold on to hope.”“It’s better to break bread than break ties.”For business owners, this is a powerful reminder. While the economy may be beyond our control, how we lead, support our teams, and connect with our customers is firmly within our grasp.This season of uncertainty is also a season of opportunity—for those willing to adapt, plan strategically, and lean into relationships. By staying financially agile and people-focused, businesses can not only weather the storm but position themselves for growth when conditions improve.What Business Owners Should Do NextThis is the time to take a close look at your financial strategy:Review your cash flow and cost projections.Plan for inflation and potential tariff impacts.Prepare now for possible tax consequences of shifting margins and spending patterns.Partnering with a trusted CPA or advisor can turn uncertainty into smart action, laying the groundwork for sustainable growth. The economy may be uncertain, but strong planning and proactive decisions ensure your business stays ready for whatever comes next.