News & Insights

One of many efforts to restore confidence in the banking system following the 2008 financial crisis, this program was intended to fend off potential contagion in the banking sector in the event of another severely adverse credit default.

Over the second quarter of 2022, interest rate risk has seen pronounced movement, with many credit unions concerned about the impact on the NEV Supervisory Test. The 0.75% increase in the Fed Funds Target Rate at the June Federal Open Market Committee meeting, due to a hot CPI print, came to the markets somewhat unexpectedly (another followed in July).

Whether it’s at the gas pump or in the supermarket, consumers are already feeling pressed by higher prices on daily necessities. What will this mean for your deposit offering rates over the same period? Given the upcoming credit and interest rate challenges, selective credit lending and a well-balanced investment ladder could help stabilize the anticipated uncertainty.

With the Federal Reserve signaling to markets that inflation fighting – rather than a focus on full employment – is the imminent mandate, the specter of rising interest rates now looms. High CPI numbers have caused this shift. But is the inflation threat real, given the supply chain effects of the pandemic and long-term rates that remain at levels well below the prior rate cycle?