Cost of funds for credit unions about to rise

Depository institutions need to plan for higher cost of funds, as higher interest rates cause depositors to shift higher yielding deposit accounts.

Most Federal Reserve watchers anticipated that the Federal Open Market Committee will raise its target federal funds rate in the fourth quarter and continue to raise rates during 2018 and 2019. The federal funds rate will rise from 1.4 percent at the end of 2017 to 2.7 percent at the end of 2019.

The following graph shows the median projected federal funds rate for the years of 2017, 2018, 2019, and 2020.

continue reading »

More News