Credit unions should not expect to see any uptick in rates until at least May of 2003, according to John Olivo, senior portfolio manager with Goldman Sachs. During a conference call hosted by Callahan & Associates, Olivo said rates will remain in the basement while the Fed keeps monetary policy on hold and GDP growth is slow. "The Fed will need one positive quarter of strong growth and prospects for a strong following quarter before rates start to rise," Olivo said.
Callahan President Chip Filson urged credit unions to leverage the low-rate environment by becoming more competitive in MMAs and mortgage lending. Filson noted that in a recent survey of members of CUs that offer mortgages, 38% of those members were unaware their credit union offered mortgages.