The Federal Reserve didn't do credit union executives any favors asthey budget and drawing up strategic plans for 2013 and beyond.

On Thursday, the Federal Open Market Committee announced itanticipates keeping the federal funds rate “exceptionally low”through at least mid-2015.

The FOMC also said in a release that it would retain the currentfed funds target range of between 0 and 0.25%.

Robert Allen, president/CEO of the $4.6 billion Teachers FCU ofHauppauge, N.Y., said the low rate environment continues to tightenthe interest income spread, and pressures credit unions intolooking at fee income, “which we're averse to.”

Allen is a member of the New York Fed's Community Depository InstitutionsAdvisory Council.

On the bright side, low rates benefit borrowing members;however, they also hurt savers and retirees living off dividendincome, he added.

Brian Turner, director and chief strategist at CatalystStrategic Solutions in Plano, Texas, said the low rate climate is“less rate sensitive to members and more relevant to how they arerecovering lost household wealth.”

Members can decrease their personal debt burdens, but Turnersaid a “burnout syndrome” is in effect as members are feeling“financial cabin fever.”

“Similar to the feeding frenzy that follows a fast, this sparks'flash market euphoria' as members hit the retail markets running,if only to satisfy their immediate hunger,” he said.

The likelihood of a prolonged, stable growth in consumerspending is still not on the near horizon, he added. Instead,spending flashes are more likely and a waiting game will continueuntil an improving employment sector alters consumer perceptionsand sparks positive spending behavior.

“This requires the FOMC to keep short term rates in check for awhile longer, while at the same time manage volatility in long-termrates,” he said. “Let's just hope that the volatility coincidesnicely with the flash markets.”

The FOMC also announced it would purchase additional agencymortgage backed securities at a pace of $40 billion per month,continue through the end of 2012 a program to extend the averagematurity of its securities, and continue to reinvest principalpayments from agency debt and MBS.

The actions, which will increase the Fed's holdings oflonger-term securities by about $85 billion each month through the2012, should put downward pressure on longer-term interest rates,support mortgage markets, and help to make broader financialconditions more accommodative, the Fed said in a release.

“The Fed believes the previous two rounds of asset purchases hada significant impact on reducing long-term interest rates and wereeffective at increasing employment by 2 million jobs over the lastfour years,” said NAFCU Chief Economist David Carrier.

“The central bank clearly expects that the next round ofasset purchases will have a similar effect in generating newemployment over the next couple of years,” he said.