Over the last several years, I have provided an upcoming outlook on economic and banking trends that will affect public and higher Ed entities. With an average predictability ranging from 50% to 75%, my desire is to spur conversation on a marketplace that deserves attention—and has a major impact on the U.S. economy.

The top ten trends I see developing in 2020 are:

1.) Do not expect an economic recession in the U.S. throughout the new year.

2.) Expect U.S. economic growth to range between 2.0% and 3.0%, with low inflation and continued strong consumer spending. An increase in U.S. manufacturing output and productivity will occur, coupled with higher job growth, thanks to new trade deals from late 2019 and into 2020.

3.) Green initiatives will gain momentum in the public and higher Ed marketplace, with strong lending-and-leasing support from the major financial institutions.

4.)  Short-term interest rates will remain steady with no expected rate changes to occur by the Federal Reserve. Longer-term rates will rise to reflect a more normal spread between the 1-, 10-, and 30-year yields.

5.) Expect bank earnings to be challenging, with lending and deposit rates reflecting little change. The use of online banks will become more prevalent in public finance. We’re already seeing U.S. corporations exploring the use of “internet-only” banks and, I believe, with higher interest rate opportunities, cheaper bank fees (due to lower overhead), and superior technology, more governments will utilize the advantages being offered by these internet-only banks.

6.) Digital currency will continue to gain attention. China has publicly announced the development of its own digital currency and the U.S. Treasury Department has established a Financial Stability Oversight Council Working Group on Digital Assets which will attempt to clear the muddy waters of digital-asset exploration and regulation. This will have no direct impact on public entities in 2020, but along with blockchain, will change the financial marketplace forever.

7.) Technology will lead the way for public entities and higher Ed to conduct transactional business with those they serve. In addition, there will be greater demands by the public for transparency, response time in addressing inquires, and requests involving financial, social, and economic priorities.

8.)  A higher rate of real estate reassessments should offset a slower percentage of tax-rate increases.

9.)  Deeper conversations and advanced planning will occur within higher Ed institutions around the enrollment challenges expected in 2026, due to the lower birth rates in 2008 and 2009. This will also lead these institutions to think differently on how to attract and retain a more diversified student body.

10.) Finally, our cashvest® and rfpPrep® offerings will continue to bring additional value to those public entities and higher Ed institutions who use them.

Note: Over the past six years, these platforms have saved our clients over $250 million.

At three+one®, we are excited about what the new year will bring to all the clients and communities we serve nationwide. Continued innovation of liquidity analysis and data, forward-thinking technology, and personal relationships will drive amazing results throughout the year. And beyond.

Our best wishes to you and those you serve. Happy New Year!