President Trump's expected surge in government spending and tax cuts will help credit unions maintain high earnings in 2017 as interest rates and loans rise, two credit union groups reported.
CUNA Mutual Group predicted the U.S. economic growth will rise from its 1.8% rate in 2016 to 2.5% in 2017 and 3% in 2018, if Trump follows through on his promises.
CUNA released a revised 2017 forecast that also shows 2017 economic growth at 2.5%, up from its previous forecast of 2.4%.
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"A booming stock market buoyed by expectations of a substantial fiscal stimulus later this year has the Conference Board's Consumer Confidence Index bumping along at a near 15-year high," Mike Schenk, vice president of economics and statistics for CUNA, said.
But Schenk said the rosy economic outlook also depends on Trump not starting a trade war.
"Our baseline forecast reflects the expectation that election-year rhetoric will be softened by more careful consideration of this big downside risk," he said.
In this hot economy, both CUNA and CUNA Mutual Group predict credit unions' return on assets to remain high, falling only slightly from 0.77% in 2016 to 0.75% in 2017.
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