The NCUA on Monday released its economic update video for July, with this month's focus on the changing yield curve in an improving economy.
“We have entered a period where increases in rates will be concentrated in long rates such as the 10-year Treasury, while short rates are likely to remain around their current levels,” the agency's chief economist, John Worth, said in the agency's announcement.
Using current economic data, Worth also discusses how credit union financial performance may be affected by the steepening of the yield curve, which he said can support profitability but also cut into refinancing activity.
He said the next phase of rate adjustment after this will likely be a rise in short-term rates and flattening of the yield curve, which will result in challenges to credit unions.
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