WASHINGTON–With the House of Representatives out of session until Thursday of this week, and with only a few hearings in the Senate of interest to credit unions, the attention in Washington this week will clearly be on the Fed and its decision related to rates.
The Federal Open Markets Committee (FOMC) kicks of its two-days of meetings today. Less than a month ago the consensus was the Fed would boost rates another 50 basis points as it seeks to tame inflation, which a year’s worth of rate increases has failed to do.
But the failure of Silicon Valley Bank, caused in part by the bank’s poor job in managing its balance sheet to adjust for rising rates, has many analysts now predicting the Fed will dial back any rate increase to 25 basis points before it adjourns tomorrow.
NAFCU Vice President of Research and Chief Economist Curt Long believes the Fed may not move rates this week.
“At the moment there is the expectation the committee will proceed with the 25-basis-point hike,” said Long during a press call. “From my perspective, I'm on the other side of the fence. I do think there is a possibility they may raise rates 25 basis points, but it's my expectation that the FMOC will pause, at least for one meeting, in order to let the dust settle. I think the events of the weekend were important considerations… I just think it makes sense for them to take a wait-and-see approach.”
Meanwhile, in Congress, the hearings taking place in the Senate are mostly focused on the president’s proposed budget, hearing that will also take place in the House.
The Senate Committee on Small Business will hold a hearing on Wednesday on Oversight of the U.S. Small Business Administration and the President’s Fiscal Year 2024 Budget Proposal, which CUNA’s deputy chief advocacy officer for federal affairs, Jason Stverak, said the trade group will be monitoring. NAFCU will be watching the hearing as well, the trade association reported.
Members of Congress Urged to Visit CUs
Separately, Stverak is encouraging members of Congress to visit credit unions in their state during the upcoming recess.
"During these uncertain economic times, it is important to remember that credit unions are not-for-profit financial cooperatives that exist to serve their members – your constituents," Stverak wrote in an email to the Hill. "Unlike banks, we do not issue stock or pay dividends to stockholders. Credit union profits are returned to their members in the form of lower fees and better loan and deposit rates.
"Credit unions are owned by their members, and that makes a tremendous difference," he added.
Stverak also encouraged members to visit CUNA's Advancing Communities website to see how credit unions are making an impact on members and communities.
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