Nearly 100 credit union attendees participated in Catalyst’s Derivatives Symposium last week. The two-day virtual event featured presentations by highly experienced in-house speakers and esteemed financial experts from Goldman Sachs, GTreasury, Eris Innovations and Mortgage Bankers Association. Presenters discussed the current and expected state of the economy, high-level credit union hedging strategies and other helpful insights for navigating today’s financial environment.
 
Catalyst Managing Principal Mark DeBree served as the panel moderator and conducted poll questions throughout the online event. Engagement at the Derivatives Symposium was strong overall, with an average interest rating of 82.8 across all job titles. Notably, CEOs (88.9) and CFOs (86.8) reported the highest levels of interest, underscoring the relevance of the event’s strategic and financial themes for executive leadership.

Overview of live poll responses:

• In Figure 1, a vast majority of attendees (91.94%) anticipate that the Federal Reserve will begin cutting interest rates in Q2 or Q3. The remaining 8% of attendees do not anticipate the first cut to occur until the end of Q4 or foresee no cuts in the near-term.
• In Figure 2, a significant majority (93%) are concerned about rate cuts and compressed margins, indicating that many institutions are preparing for a potential rate decrease and are worried about higher funding costs or rapidly falling asset yields.

Takeaways

These key responses indicate that many attendees anticipate a decrease in interest rates sooner this year and expressed concern regarding margin compression if this occurs. These findings highlight both the timeliness of the Derivatives Symposium’s content and the urgency for financial leaders to evaluate hedging strategies and manage risk in an evolving rate environment.
 
Catalyst values working with credit unions to craft advanced strategies for managing risk exposures, building knowledge bases within management and ALCO ranks and helping board members become more familiar with derivatives.

Don’t let the change in rates catch your earnings profile off guard. The second annual Derivatives Symposium, now available on-demand, provides a baseline for learning how interest rate derivatives can help your credit union create a strong risk management program.