DULUTH, Ga. — The Federal Reserve Board's dramatic "and aggressive" 75 basis point rate cut today signals for credit unions a continued defensive strategy to further extend investment maturities 12 to 24 months amidst a pursuit of greater yield protection, according to the top investment officer for the $1.8 billion Georgia Central Credit Union.
"The Fed mentality has shifted away from inflation to an all out assault on preventing a recession and that means rates will continue to fall in the months ahead," forecast Cory Johnston, chief investment officer for the Georgia Corporate.
Johnston's comments came as Georgia Central also announced year-end investment sales jumped to $1.25 billion, a record 89% increase. The figure included term certificates, fixed callables, SimpliCD and brokered marketable securities.
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Johnston said that 2007 started off slow, with members' behavior motivated by two consecutive years of strong loan demand. "In the early part of the year we were able to assist members with liquidity by introducing them to the opportunity to issue certificates through SimpliCD," he said. During the year, 14 CUs took advantage of this option for raising deposits.
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