FEDERAL FUNDS RATE VERSUS YEILD ON LOANS
FOR U.S. CREDIT UNIONS | DATA AS OF 06.30.22
© Callahan & Associates | CreditUnions.com
- The average yield on loans for U.S. credit unions historically lags changes in the federal funds rate by a minimum of one year.
- When the Federal Reserve cut the federal funds rate beginning in the second half of 2007, it wasn’t until mid-2009 that the yield on loans started to reflect the repricing of loan portfolios.
- Similarly in 2016, loan yields at U.S. credit unions fell throughout the year despite the benchmark rate rising.
- The Fed has raised interest rates five times in 2022 — for a total of 300 basis points since March — and is expected to raise rates into 2023. The historical data above provides perspective on when credit unions might expect to see a change in their own loan yields.