To all our members, we hope you have been enjoying a happy holiday season so far. You are the people who spread goodwill among the communities your credit unions’ serve all year round, and we look forward to continuing to serve you in 2024! To help you get a jumpstart on the new year, we have a special gift for all our LaCorp member credit unions and even a limited number of new members but more about that later!
Where Will Rates Be Going In 2024?
LaCorp’s holiday bonus will come in handy as 2024 is already looking to be an interesting year when it comes to the Federal Reserve and what they will do with interest rates. Inflation brought about by efforts to keep the economy going during the height of the COVID-19 pandemic continues to be a key part of the conversation on whether to hold steady or start cutting. At our latest check, the inflation rate is sitting at 3.2%, relatively close to the Fed’s target inflation rate of 2%, but no one quite knows what the Fed’s will do or when.
According to Bankrate’s Economic Indicator poll for the third quarter of 2023, the majority (94%) of economists say that the Fed could begin cutting interest rates as early as 2024, while the remaining 6% say they expect rate cuts to come in 2025 or later. Additionally, most economists believe that 2025 is the year when the inflation will return to the 2% target. Even among those who believe rate cuts will happen in 2024, there is some debate regarding timing. Some economists think interest rate cuts will come as early as March 2024, yet others predict the cuts won’t happen until the second half of the year.
Ultimately, the Fed’s decision to cut rates or keep them elevated will come down to how the economy performs during the first few months of the new year. If it starts to slow down early on, then the Fed will probably be forced to act, and if not, they may choose to hold off to maintain stability. In an article from CNBC, according to chief fixed income strategist at Charles Schwab Kathy Jones, this period of inflation has made the Fed more hesitant to act. “In a different cycle, when inflation hadn’t spiked so much, I think the Fed would have been cutting rates already,” Jones is quoted as saying. “This is a very different cycle. There is going to be much more caution on their part.”
Be Ready for Whatever 2024 Brings (With A Special Gift)
2024 is going to be an interesting year for interest rates and how that impacts our credit unions, so to help prepare for 2024 and in appreciation for a successful 2023, LaCorp is offering members a year-end Money Market Maximizer rate special! Through Jan. 6, 2024, we are giving you a 40-basis point bonus on each money market tier on balances up to $22 million! Think of all the possibilities you could use the extra income for! You could boost your reserves or liquidity, or perhaps, you could put the money toward a new mascot costume since the one you have is old and falling apart at the seams.
This offer isn’t only available to existing members; a limited number of new members can also join in as a welcome gift from us at LaCorp! Keep in mind, new members get this rate on a first come-first served basis, so be sure join now and share in LaCorp’s success while getting ready for the year ahead. Reach out to the LaCorp team today to learn more!