CU Economists Expect Fed To Maintain Pace
WASHINGTON-The Federal Reserve spiked short-term rates another 25 basis points last week, pushing the benchmark target for overnight Federal Funds to 2.5%. Credit union economists expect the Fed to hold to its higher-rate strategy, at least for the short-term. Dwight Johnston, vice president of economic research for WesCorp FCU, said he expects the Fed to continue adding 25 basis points to the short-term target, at least in the near future. "It's looking like a cinch that they'll get to 2.75%," said Johnston, adding there is a broad consensus the Fed could take the benchmark rate all the way up to 3.5% by the end of the year. In its statement, the Fed said it raised the short-term rate for the sixth time in the past eight months to make sure a strengthening economy does not trigger higher inflation. So far the rise in short-term rates has had little effect on credit union deposit rates, which have been stuck for the past year around all-time lows for regular shares (0.75%); share drafts (0.45%); and money market accounts (1%), according to DataTrac Corp., which follows 1,000 credit unions. But credit unions have raised CD rates during that time by between 25 BPs and 35 BPs.
AACUL Board Is Re-Elected
PALM SPRINGS, Calif.-At its business meeting, the American Association of Credit Union Leagues re-elected its current slate of board members: Paul Mercer of Ohio as chairman; Rick Pillow of Virginia as 1st vice chairman; Rosie Holub of Missouri as 2nd vice chairman; Brett Thompson of Wisconsin as treasurer; Bill Mellin of New York as secretary; Dan Egan of Massachusetts/Rhode Island/New Hampshire as past-chairman ex-officio, and Susan E. Newton, executive director, ex-officio.
CUNA Names Hawkins To Post
WASHINGTON-Thomas D. "Trey" Hawkins III has been named political director by CUNA, where he will be responsible for all of CUNA's political programs, including the Credit Union Legislative Action Council (CULAC), the "get out the vote program," the series of campaign schools, and serving as a liaison to the national party committees. Hawkins most recently served as finance director for the Louisiana Democratic Party in Baton Rouge during the 2003-04 state and federal elections, respectively.
Wash. Regulator Steps Down
OLYMPIA, Wash.-Helen Howell, the chief credit union and bank regulator, resigned as director of the Department of Financial Institutions to give new Democrat Gov. Christine Gregoire a clean slate for her own cabinet. Howell was promoted to head the DFI upon the 2002 retirement of long-time director John Bley. Her resignation takes effect Feb. 25.
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