Thursday, August 17, 2017

Economic Growth Continues Above Trend for 2018 and Beyond

Key Economic Indicators Show Continued Market Opportunities but Slow Down in Sight

Credit unions can expect the U.S. economic growth will remain above trend in 2017 and into 2018. That's what our director and chief economist Steven Rick shared in our eighth annual Discovery Conference today.

Rick also shared that, as credit unions continue to reap the benefits from this economic expansion, the next two years will continue to see a growth of up to 2.4 percent.

“We continue to benefit from the second longest economic expansions in U.S. history and credit unions have benefited from these tailwinds,” said Rick. “But we should continue to expect to see the Federal Reserve raise interest rates in the next year. We could also see a modest recession in 2019, due to a short term credit cycle recalibration, but this will not emulate the recession we experienced in 2008.”

He explained that both long and short-term interest rates will continue to rise over the next four years, as they start to recalibrate to their natural rates, approximately 3 percent in short-term interest rates and 4 percent in 10-year Treasury bond interest rates. This recalibration will effect consumer spending in the coming years with consumers looking to pay down debt and increase their savings due to higher interest rates.

Click here to read the full recap of this session in today's press release.