National Association of Federal Credit Unions (NAFCU) Chief Economist Curt Long issued the following statement today in response to the Federal Reserve’s announcement of an interest-rate increase.
“On the whole, the impact of a quarter point rate hike on U.S. households should be minimal. But for the millions of savers living on fixed incomes it surely comes as a relief, especially if it is accompanied by a forecast for more in 2017. To that end, the committee’s economic projections may hold more interest than the statement itself,” said Long. “For typical Main Street Americans, the move serves as a reminder to review the rates on their savings and borrowings and to shop around. They may find that even in a low-rate environment there are institutions willing to provide superior rates and higher-quality service than the big Wall Street banks.”
“The Fed will not make any assumptions about President-elect Trump’s economic agenda. A large spending bill accompanied by tax cuts certainly has the potential to increase growth and inflation, paving the way for faster rate normalization in the coming years. But the Fed will stick to its wait-and-see approach,” Long noted.