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The U.S. housing market is softening, but opinions vary as to the impact on the national and global economy.

For credit unions specifically, experts were cautioning that rates could reverse their steady increases later this year or early next, and that CUs would be wise to buy extendable securities that provide the right to extend the maturity date in the future as a means of protecting against interest rate risk.

All of those predictions and advice was on display at WesCorp's Future Forum conference here, as economists offered their outlook on interest rates, inflation, GDP growth and other factors that affect credit unions' bottom lines. Martin Baily, senior fellow at the Institute of International Economics, said he does not anticipate a "crash" in housing prices, and foresees slower but steady economic growth.

Meanwhile, two WesCorp economists-Dwight Johnston, vice president of economic and market research, and Ron Araujo, vice president of investment strategy and education-expressed their concerns about housing overvaluation, and predicted the Federal Funds Rate will decline either in the second half of 2006 or in 2007 (see coverage, below).

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