PLANO, Texas–With numerous challenges in the new year, Catalyst Corporate said it has created a conversational, 18-minute video featuring experts from Catalyst Investments, Analytics and Balance Sheet Consultation Services who discuss the economy, the markets, and most importantly, what lies ahead for the credit union industry.
The video features Mark DeBree, vice president of ALM Services; Sarina Freedland, senior investment officer, and Casey Peterson, senior advisor. It is moderated by Mike McGinnis, VP of Financial Solutions. In the video the panelists weigh the impact of recent Federal Reserve actions and market reactions on credit union balance sheets.
“The market's saying that they're expecting some sort of economic downturn, and the Fed's saying, ‘You know what, we feel good about the economy,’” DeBree states during the video. “Who do you think is right? Is it the Fed or is it the market?”
Added Peterson, “The nice part about that equation is even though the market is viewing things negatively and the Fed is viewing things positively, the results of what has happened – interest rates moving higher – have been significantly beneficial for credit unions.”
‘Stronger Earnings’
Earning assets are higher, and that, in turn, allows credit unions to have stronger earnings, Peterson said.
“Due to rate changes, things that were attractive a year ago may not be as attractive this year,” Peterson continued. “So moving into 2019, for example, you can get 30-year real estate loans with a coupon of five percent, whereas the last several years, it's been at least three-and-a-half. That could add some duration and add some income.”
Looking at the investing side of the balance sheet equation, Freedland expects a flattening yield curve during 2019. “I think that's important for investing. You want to put on some yield insurance now to protect yourself when yields do go down. There are some headwinds to look out for in the market – and the key things are trade-related. Trade is number one, two and three.” The uncertainty surrounding trade issues makes it so impactful, Freedland said.
To view the full video, visit the news section www.catalystcorp.org.