GREENBORO, N.C.—First Carolina Corporate presented regional credit union management an opportunity to discuss what’s needed to crest the coming waves of the Federal Reserve’s expected short-term rate increases by hosting a complimentary Lunch and Learn event at its corporate office.
Fred Eisel, SVP and Chief Investment Officer of First Carolina, discussed the two issues credit unions need to face in light of looming short-term rate increases—investing in a difficult rate environment or dealing with tighter liquidity as loan demand increases. Eisel said, “It now appears the FOMC will not adjust short-term rates until September, at the earliest. If the payroll data comes in strong in the next few months and there is a slight uptick in wage inflation, this will most likely push the Fed to move sooner rather than later. They need to begin to normalize rates.”
First Carolina VP of ALM Services Melissa Scott focused on the consideration of Non-Maturity Shares and their importance to interest rate risk. “Once your non-maturity share assumptions are developed and reasonable, stress them to identify the risk if you are wrong,” she said.