CU Funding Compass Week of September 13, 2023

Core US inflation, which excludes food and energy costs, ran at a faster-than-expected monthly pace in August, leaving the door open for additional interest-rate hikes from the Federal Reserve. The advance was +0.3% from July, the first acceleration in six months. The report adds to concerns that the renewed momentum in the economy is reigniting price pressures. While Fed officials have been growing more optimistic they can tame inflation without a recession, a reacceleration in price growth could force them to push interest rates even higher, with the risk of sparking a downturn in the process.

As is the trend in recent months at the end of a quarter, Share Certificate issuance is fast and furious with hundreds of credit unions entering the market across the curve with the typical points of concentration being 24mo’s and in. Our guidance for many of the institutions we work with, contingent upon urgency, has been to come out strong with levels that will complete the raise in a timely fashion or risk getting caught in a situation of chasing rates higher heading in to the second half of the month.