Some things to consider about a rising rate environment

The Federal Reserve increased the federal funds target rate to a range of 50-75 bps at its mid-December meeting.  In its forecast (the “dot plot” shown below), the Fed indicates further tightening in 2017.

While credit unions have certainly lived through rising rate environments in the past, no one has ever managed a credit union through a rising rate environment coming from the lowest interest rates our markets have ever experienced.  Combine this with how dramatically the world has changed since the last time rates went up (setting aside the 25 bps increase in December 2015, the last rising rate environment experienced came during 2004 to 2006) and the future is nearly unprecedented.  Can you believe that Apple’s first iPhone came out in 2007 (Source: Time)?

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