CHICAGO-The Federal Reserve is projecting a slow, moderate economic recovery, and credit union economists see no reason to disagree.
Dr. Tun Wai, NAFCU's chief economist, noted that while pockets of the U.S. are seeing recovery and even expansion, overall, a "sluggish" future lies ahead.
But what about fears of a "double-dip" recession?
"I'm in the camp where I don't think there will be a double-dip, but I will say the probability of a double-dip has increased," Wai tol NAFCU's Annual Meeting.
Wai urged credit unions to monitor the balance sheet of the Federal Reserve for some insights into what it might have planned (Federal Reserve form H-4.1). That document records the total amount of assets held by the Fed. "If you see that top line start to decline," said Wai, "it's an indication the Fed may be about to take some action."
For 2011 the Fed is projecting GDP growth between 3.5% and 4.2%, with inflation forecast at 1.1% to 1.6%. As for that "key indcator," unemployment, the forecast is 8.3% to 8.7%. The forecast from the Credit Union Economists Group (CUEG), of which Wai is a member, is more conservative, and foresees 4.74% loan growth and 6.37% savings growth in 2011 among credit unions.
