Back in January of this year, I made some bold predictions about the changing landscape of banking for 2016. I am humbled and pleased to know that my accuracy was above 70%.
Here are my top 10 predictions for 2017:
1.) The U.S. will see economic growth of over 3%, with the largest increases appearing in the second half of the year.
2.) Pressure on U.S. treasuries will come from overseas selling, from foreign, (i.e. China and Saudi Arabia). I see this paired with greater domestic buying of treasuries due to the repatriation of corporate dollars that will make their way back to the States.
3.) Short-term interest rates will increase by 50 basis points with action taken by the Fed of 25 basis points each in Q2 and Q4.
4.) The Dodd-Frank book will be closed for new regulations, but will remain open for revisions. Don’t expect this law to be repealed.
5) Bank profitability will improve and greater attention will be paid to the public and higher education sectors.
6.) Public entities will see stronger bottom lines due to improving economic conditions, while Higher Ed institutions will face stiff headwinds due to demo- graphic changes and fewer foreign-student enrollments.
7.) Liquidity analysis and operating cash focus will take center stage as higher short-term rates will present opportunities for new sources of income.
8.) The U.S. trade deficit will shrink by at least 50%.
9.) The number of bank branches to close will exceed the 2016 level of 1,600. On the plus side, there will continue to be a greater push toward direct online-banking technology.
10.) Average short-term banking deposit rates will lag behind the rise in interest rates; U.S. treasuries will significantly exceed deposits rates throughout 2017.
At three+one we can help you prepare for the coming year and experience an increase of income and savings to your bottom line. Our liquidity analyses enable public entities and Higher Ed institutions to be proactive in working with their financial institutions and secure higher deposit rates. Our proprietary “time/value and marketplace-worth” analyses help our clients realize, on average, tens to hundreds of thousands of dollars in new income on low- and non-performing cash.
If you are not yet prepared to take full advantage of the higher interest outlined above, call us today so we can help you get set for 2017’s many opportunities.
Happy New Year!