Over the last several years, three+one has blogged frequently about the changing landscape of banking and the value of cash as an asset.

Last year at this time, I made a prediction of the top 10 trends for 2017. My batting average was in the same range as 2016, over 70% correct.

As we head into 2018, the top 10 trends I see evolving are as follows:

1. The Federal Reserve will approve three rate hikes of .25% each to reach a level of 2.00% on Fed fund rates.

2. The 30-day T-bill rate will break the 2.00% level.

3. The average bank Earnings Credit Rate (ECR) will break the 1.00% level.

4. The U.S. GDP will be on pace to reach 4.0%, and the nation’s unemployment rate will break the 3.75% level. Over two million new jobs will be created as a result of the newly approved federal tax reform legislation.

5. Continuing 2017’s trend, public entities will enjoy higher cash levels throughout 2018.

6. Under the leadership of the Federal Reserve’s new chair, Dodd-Frank regulations will be relaxed but not eliminated. The changes made will be beneficial to banks of all sizes.

7. There will be a spike in the number of community bank mergers.

8. Public entities and higher Ed institutions will issue a greater level of banking Request for Proposals (RFPs) due to greater pricing pressures, bank branch closings, and more competitive deposit-rate offerings.

9. Alternative payment options will grow, given new technology, greater restrictions placed on the usage of cash and checks, and more attention being given to digital currency and its regulation.

10. By year’s end, three+one will have helped public entities and higher Ed institutions realize upwards of $20 million in new interest income as a result of best practices in liquidity analysis and the proactive management of their cash.

At three+one we strive to help clients navigate through the changing landscape of banking and an environment of rising interest rates.