October 22, 2025—EasCorp’s ALM Academy provides participants with insights to prepare them to make informed decisions and to better manage their balance sheets in a dynamic financial environment. The annual professional development conference, presented in partnership with ALM First, kicked off on Wednesday, October 22 at the Conference Center at Waltham Woods in Waltham, MA.
Headwinds, Opportunities, and the Credit Union Outlook
In a standout Day 1 ALM Academy presentation, Tavish Taylor, Director, Advisory Services, ALM First, described the current economic climate as a pivotal moment for credit unions. He urged them to navigate this environment, assuring them that “volatility creates vulnerability, but also opportunity.” In the current environment, credit unions may see opportunities with falling rates driving refinance activity, the ability to differentiate through member financial wellness, and technology investments paying off. His insights align closely with the broader U.S. economic data and Federal Reserve policy direction as economic factors begin to take form.
Inflation and Interest Rate Dynamics
After peaking at 8.5% in July 2022, inflation has cooled to around 2.9% this fall as the economy digests over two years of aggressive tightening. The Federal Reserve, which had lifted the federal funds rate to a peak of 5.33% by August 2023, began cutting rates in mid-2025. Current projections confirm two more rate cuts by year’s end, bringing the policy range closer to 3.50–3.75% by December. The most recent FOMC minutes show policymakers balancing slowing employment and persistent inflation risks as tariffs keep pressure on goods prices. For credit unions, these developments have led to squeezed margins: deposit costs repriced rapidly upward with the Fed rate hikes, rising faster than loan repricing, and legacy low-yield mortgage portfolios continue to drag on revenue.
Labor Market and Consumer Confidence
The labor market’s deceleration is evident. Job creation slowed to fewer than 25,000 new positions in August, and unemployment has drifted to 4.3%—its highest in nearly four years. Revised BLS data revealed substantial downward adjustments to prior employment estimates, reaffirming a trend toward softer conditions. Consumer sentiment has followed suit: both The Conference Board’s and the University of Michigan’s confidence measures signal deepening pessimism tied to weaker job prospects, ongoing inflation fears, tariff uncertainty, and the lingering effects of the October federal shutdown which delayed major data releases.
Credit Trends and Member Financial Health
Credit unions are witnessing mounting member stress. Loan delinquency rates are up sharply across all income levels since 2020, with lower income borrowers facing catastrophic increases, according to NCUA and Federal Reserve data compiled in Taylor’s report. This deterioration accompanies record-high credit card balances and a plunge in personal savings rate—signs of systemic strain rather than isolated distress. Other factors, including resumed student loan repayments and growing credit card dependence, are compounding household vulnerability and limiting new loan demand.
The Bottom Line
“Volatility creates vulnerability—but also opportunity,” Taylor continued. “The credit unions that will thrive are those that act strategically, not reactively.” With inflation stabilizing, rates beginning to ease, and economic data mixed, the institutions that will thrive into 2026 are those that interpret macroeconomic volatility not as threat but as a call for disciplined reinvention and stronger member-focused innovation.