Furthermore there seems to be little room for the

  • No School
  • AA 1
  • 3

This preview shows page 3 out of 3 pages.

to unleash a flood of oil into a tottering global economy. Furthermore, there seems to be little room for the Federal Reserve to enact monetary policy or confidence that doing so will offer lasting support to markets and the economy. With market interest rates already near zero for even the longest-dated Treasuries, some Fed officials are even contemplating opening up the Federal Reserve Act in order to provide more ammunition to the central bank. Ability of impacted nations to restart their economies is still unknown. While it is encouraging that China and South Korea have been able to avoid the worst-case scenarios of exponentially-expanding contagion, measures taken thus far have already sapped economic growth. As they try to get back to life as normal, headwinds remain. There is the potential for another outbreak of the virus. Consumers may still be reluctant to gather in crowds, much less spend as before. And even if domestic production returns to scale, their industries face waning global demand from the rest of the world. As with their mitigation and containment efforts, the rest of the world will be eyeing their efforts to prime the economic pump. What does all this mean for my credit union? Experiences will vary… Certain credit unions are likely to be hit harder by the economic and financial impact of the coronavirus than others. Those located in areas heavily dependent on oil production or those in vacation or conference destinations (Las Vegas, Orlando) may struggle for a time. Depending on how the virus responds to warmer weather, your region’s climate may play a role. Credit unions located in denser urban areas should probably plan on seeing a bigger impact from the virus than those in rural areas where members and staff can more easily limit close contact with others. Finally, given that social distancing may be part of the response to the coronavirus threat, those credit unions that have invested in technology in recent years and have robust digital offerings are better placed to continue to serve their members in the coming months. NAFCU’s Research Division analyzed data from the Bureau of Labor Statistics, which break out local employment by industry. Those areas that have relatively high job concentrations in oil and gas extraction, retail, hotels, and restaurants are more vulnerable to job losses related to the impact of the virus. NAFCU members may download that data here . … but all will be impacted. For years, credit unions have been urged to prepare for the potential return of rates to levels that were more typical of prior decades. Now we find ourselves yet again in a zero-rate world. While the Federal Reserve has not taken its target rate to that point yet, markets are betting heavily on that happening at some point this year, while longer-dated Treasuries are already there. This low-rate environment is likely to persist for at least the remainder of 2020. While this may spur some refinance activity, it makes for a difficult environment to generate earnings.
Image of page 3

You've reached the end of your free preview.

Want to read all 3 pages?

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors