It will be a slow week in Washington with just five days left until the August recess, but a rate decision from the Federal Reserve on Wednesday could impact credit unions in the months to come.
Despite strong economic growth, Fed Chairman Jerome Powell signaled that the Fed will cut interest rates this Wednesday at the end of the Federal Open Market Committee's two-day meeting. Curt Long, chief economist and vice president of research at the National Association of Federally-Insured Credit Unions, expects the rate cut to be roughly 25 basis points.
This would be the first rate cut since the financial crisis. If the Fed does reach its target rate, credit card users will save approximately $1.5 billion in interest, according to a new survey from WalletHub. Other services that CUs offer will also be affected, such as student loans and mortgages.
Members of the House already have returned to their districts, providing an opportunity for credit unions to meet with their local congress people.
“The CUNA League System will be engaging with our member credit unions to reach out to members of Congress, senators and engage them while they’re home for the August period,” said Eli Joseph, the Credit Union National Association’s deputy chief advocacy officer. “We will be highlighting the importance of expressing the credit union difference.”
In the interim, the Senate is expected to vote on a roughly $1.4 trillion budget deal that would increase spending while also suspending the debt ceiling. The bipartisan agreement is for fiscal years 2020 and 2021.
The House Financial Services Committee will hold a hearing on Friday that examines the housing crisis in Michigan while the Senate Banking Committee will hold a hearing that looks at regulatory frameworks around digital currencies and blockchain.
Both chambers of Congress return to Washington on Sept. 9.
