Leadership in a Time of Challenge

PUBLISHED SEPTEMBER 2025

If there’s one constant in the business climate, it’s the certainty of change. And as we close out this month, a trio of significant developments from Washington demands the attention of every business leader in the Kansas City region. The interplay between interest rates, labor-market data, and immigration policy is creating a new calculus for strategic planning—one filled with both promise and peril.

The Fed’s Green Light—With a Yellow Caution Light Attached

The Federal Reserve’s recent quarter-point interest-rate cut is the most straightforward positive signal in this mix. After a prolonged period of expensive capital, the shift toward cheaper borrowing costs is a welcome change. For leadership teams, this should pivot the conversation from pure cost conservation to strategic growth investment. We’re likely to see increased activity in interest-sensitive sectors vital to our region: commercial real estate development, manufacturing expansion, and infrastructure projects that have been on the drawing board.

Let’s not go crazy with the celebration, though. The consensus suggests this is not the start of a race to zero or the artificially low rates that held for years before the 2022 inflation spike. That double-edged sword fueled a long expansion that benefited many, but that produced artificially high valuations that made acquisitions and expansions more expensive, cramped the natural business rhythms by supporting less-efficient competitors that should have exited the market, and left us with a financial system that is more fragile and sensitive to the current rate-hiking cycle.

So be careful what you wish for. In essence, years of low interest rates built an economy addicted to cheap capital. The painful process of weaning off it—through higher rates—is the defining economic challenge of today. Understanding this hangover is key to navigating the volatility ahead.

Persistent inflation concerns mean the Fed is likely to proceed with caution, perhaps one or two more small cuts. The message for executives is to be agile: Secure financing for that expansion now, but don’t base your long-range model on a return to the ultra-low rates of the past decade. This is an opportunity, but it requires disciplined, not reckless, ambition.

A Cold Shower for the Talent Pipeline

Then comes the stark reality check from the H-1B visa surcharge that the Trump administration just unveiled. That plan to levy a $100,000 fee—annually—and raise the minimum salary floor to $150,000 is a seismic shift. For Kansas City’s burgeoning tech scene, its engineering firms, and its world-class healthcare and life sciences institutions, this is a direct threat to competitiveness.

The intent to prioritize American workers is clear, and it should spur investment in local upskilling and apprenticeship programs. But the bluntness of this instrument is alarming. The increased cost will disproportionately harm the very startups and mid-sized companies that are the engine of our innovation economy. The grave risk is that it becomes cheaper to offshore entire functions rather than hire locally, ultimately costing American support jobs. For KC companies reliant on specialized global talent, this isn’t just a higher cost of doing business; it’s a potential strategic rupture that may force a complete rethink of where and how they operate.

Labor Market Smoke and Mirrors

Finally, the Department of Labor’s massive downward revision of job-creation numbers—totaling more than 1.7 million jobs lost from the original estimates over two years—paints a sobering picture. The labor market, it turns out, was significantly weaker than we were led to believe. This “new” data amplifies economic concerns and may have been a key factor in the Fed’s decision to cut rates.

For business leaders, this revision is a critical reminder to trust your own ground-level intelligence over top-line national headlines. It confirms that the hiring environment has been tighter than perceived, which aligns with the persistent challenges many employers here face in finding qualified workers. This data, showing a cooling economy, paradoxically makes the H-1B restrictions even more damaging, as they constrain the talent pool precisely when organic growth is more difficult.

The Kansas City Calculus

So, what’s the takeaway as we look to the fourth quarter? We have a push for growth through cheaper capital, but a pull backward from a tightening labor supply and a policy that deliberately constrains access to specialized skills.

The opportunity lies in strategically leveraging lower interest rates to invest in automation, productivity tools, and domestic training programs that can mitigate the talent crunch. The threat is that the cost and complexity of accessing critical skills will stifle innovation and slow our regional momentum.

The path forward requires a balanced, clear-eyed strategy: pursue growth, but double down on building and retaining your workforce right here at home. The businesses that navigate this new terrain most effectively will be those that see these developments not in isolation, but as interconnected forces shaping their next move.