FOR IMMEDIATE RELEASE   
May 2, 2022
Washington, DC

In the April 2022 CUNA Economic Update, CUNA Senior Economist Dawit Kebede explains the possible impact the Federal Reserve’s updated monetary policy will have on inflation through 2023. 

Highlights from the April update include:

• Interest rates could surpass levels not seen since 2007: CUNA economists expect interest rates to reach 2.50% by the end of 2022 (2007 levels), rising to 3.25% by year-end 2023. 
• Inflation expected to slow down: The rate of Core inflation rose by 0.3% in March compared to 0.5% in February. CUNA economists expect inflation over a 12-month period to slow down from a 40-year record high to 5.0% by the end of this year and 3.0% by the end of 2023.
• The unemployment rate has fallen 40% over the last 12 months: Unemployment currently sits at 3.6%, with an estimated two openings for every job seeker. Low unemployment contributes to high consumer demand, affecting inflation.

“If the Fed turns out to be particularly skillful and lucky, these [interest] rate movements will slow the economy enough to cool inflation without causing a recession. However, the risks are that the monetary tightening could cause a mild recession in 2023 or 2024.” — Dawit Kebede, PhD

The link between interest rates and inflation

“It is very important to get inflation under control, which is why the Federal Reserve already started raising the federal funds rate, and also announced several increases throughout the year…. The goal is to lift rates so they prevent prices from going up, but not so high that they slow down economic activity.” 

Predictions on the 10-year Treasury rate

“Although difficult to forecast, we expect the 10-year Treasury rate to rise to 3.25% by December 2022, and to 3.5% next year.”

Dawit Kebede, PhD, is a Senior Economist for the Credit Union National Association (CUNA). He has over eight years of research experience with a focus on trade, employment, and consumer finance. Kebede has been quoted by Fox Business, CNBC.com, and MarketWatch, among other outlets. 

Please contact Deshundra Jefferson (djefferson@cuna.coop) to set up an interview with CUNA Senior Economist Dawit Kebede.

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About CUNA:           
Credit Union National Association (CUNA) is the only national association that advocates on behalf of all of America’s credit unions, which are owned by 130 million consumer members. CUNA, along with its network of affiliated state credit union leagues, delivers unwavering advocacy, continuous professional growth and operational confidence to protect the best interests of all credit unions. For more information about CUNA, visit cuna.org. To find your nearest credit union, visit YourMoneyFurther.com.

CONTACT:          
Deshundra Jefferson   
CUNA Communications        
202-809-4081