Skip to main content

Federal Reserve opted to leave interest rates unchanged

WASHINGTON–As many had forecast, the Federal Reserve opted to leave interest rates unchanged, but also gave a strong hint that it could raise rates and tighten monetary policy before the year is out. In a statement, the Fed said U.S. economic activity had picked up and job gains were "solid" in recent months. The vote was 7-3 to keep rates where they are.

"The case for an increase in the federal funds rate has strengthened," the Federal Reserve said following its two-day policy meeting.
It added that its rate-setting committee had decided against raising rates "for the time being," until there was more evidence of progress toward its employment and inflation objectives.

The Fed has held its target rate for overnight lending between banks in a range of 0.25 percent to 0.50 percent since December, when it raised borrowing costs for the first time in nearly a decade.
Two Fed presidents--Kansas City Fed President Esther George, Cleveland Fed President Loretta Mester and Boston Fed President Eric Rosengren—have both said they favor raising rates now.
Meanwhile, the Fed also indicated it will take a less aggressive approach to increasing interest rates next year and in 2018, and cut its longer-run interest rate forecast to 2.9% from 3.0%.
At the end of 2015 the Fed indicated that four rate increases were likely in 2016, but it has moved just once on rates this year.

In response to the Fed’s decision not to move on rates, CUNA’s chief policy officer, Bill Hampel, said
“Although the Fed did not move this time, an increase in the fed funds target rate would have been consistent with an economy approaching full employment with moderately rising inflation.  Therefore, an increase by the end of the year is very likely, to be followed by further increases next year, although a return to ‘normal’ rates will take several years. Higher short-term interest rates will provide welcome relief to savers, and should present no problems for credit unions.”
One day before the Fed’s decision, NAFCU’s chief economist, Curt Long, predicted during the group’s Congressional Caucus that the Fed would not act.

Comments

Popular posts from this blog

Celebrating 40 Years Of Credit Union Impact

From shaping the industry’s approach to data to framing the conversation around key industry issues, here’s a look at the impact we’ve made — and what’s to come Aaron Passman Let’s take a trip back in time. It’s Monday, April 1, 1985. You’re headed home from work at the credit union, one of more than 10,000 nationwide. You’re sitting behind the wheel of a Chevy Cavalier — the top-selling car in America at the time — with “We Are The World” piping out of the speakers. Not surprising, as it’s the No. 1 song in the country. You’ve got to make a stop at the grocery store, where the price of eggs has dropped to about 50 cents a dozen — roughly 20 cents cheaper than one month prior — but you’re already starting to think ahead to the weekend. Maybe you’ll head to the theater for “Police Academy 2,” and see what all the fuss is about — after all, it’s the most popular movie in America. But tonight you’re planning to sit down for the NCAA championship game to see whether Villanova can pull off ...

Zelle Discontinues Standalone App, Shifts Users to Bank and Credit Union Platforms

SCOTTSDALE, Ariz.—The standalone Zelle app is no longer available for sending or receiving money. Users are now encouraged to enroll through a participating bank or credit union’s app to continue using the peer-to-peer payment service, PYMNTS reported. Zelle had announced in an Oct. 31  blog post  that it would make this change, and it completed the move as of Tuesday (April 1), according to a frequently asked questions  page  on its website PYMNTS said/ “More than 2,200 banks and credit unions across the U.S. now offer Zelle through their mobile app or online banking site,” the company said on the FAQ page. “As a result of this growth, in October of 2024, we announced that we are removing the ability for users to send or receive money using the Zelle app starting April 1, 2025.” PYMNTS noted that the page advised users of the Zelle app to visit a “find your bank” page on its website to see if their bank or credit union offers Zelle; to...

Jim Nussle To Retire From America’s Credit Unions

  WASHINGTON—America’s Credit Unions President and CEO Jim Nussle plans to retire from the trade association, ACU announced. ACU said Nussle did not specify an exact date for his retirement but rather expressed his desire to provide the ACU board the “full flexibility” to conduct a search for a CEO over the next several months on a timeline of their choosing, and to ensure his ongoing efforts to champion the organization’s advocacy agenda.   Jim Nussle “Serving credit unions is a deep personal privilege. After a long career in advocacy from both sides of the policy making table, leading CUNA and the honor of helping to create and lead America’s Credit Unions, it is soon time for me to pursue new interests in retirement. My announcement today is intended to provide the board the time to conduct a thorough national search to find the next leader for the Association,” Nussle said.  “My full and ongoing focus will be on our intensive credit union advocacy efforts to prot...

Unlocking the Power of AI:

 

Havoc.’ ‘Debacle.’ Analysts See Rough Road Ahead for Autos With Tariffs

WASHINGTON–What’s known: should President Trump’s tariffs remain in place, new and used vehicle prices are going to get even higher. The unknown: Will members stop buying cars, move from new to used, or given how many buy cars according to payment, move to less-expensive models? The tariffs also may create challenges for credit unions that serve some autoworkers. All of those questions and more remain much in flux with analysts predicting  auto prices could rise by $5,000 to $10,000 per vehicle and wreak havoc on the market as the result of 25% import tariffs on vehicles and auto parts.   As the CU Daily reports separately, however, Black Book believes automakers will spread out the incremental cost of tariffed vehicles across their entire showroom to retain relative vehicle transaction prices. Still, the company expects tariffs to push the average transaction price on vehicles to more than $50,000. ‘A Debacle’ “The tariffs are a debacle of epic proportions for the a...