Fed Bumps Rates By a Quarter Point

WASHINGTON – The Fed made another 25 basis points increase last week bringing the fed funds rate to 1.75%. The Fed said in its statement that inflation is pretty well in check and will allow it to take a “measured” pace to adjusting rates. “The Committee perceives the upside and downside risks to the attainment of both sustainable growth and price stability for the next few quarters to be roughly equal,” it stated. NAFCU Economist Jeff Taylor said he expects the Fed to raise another quarter point by the end of the year, bringing the fed funds rate to 2%. “The important thing for credit unions right now it to look at re-pricing their loans,” said Taylor. Credit unions tend to re-price slower than banks, which could put a squeeze on margins.