The Fed's announcement that any rate hikes are now not likely until 2014 (or at least that's what analyst are saying their comments mean) is great comfort to me. They don't expect the world to end sometime in December of this year. While we are on other signs the end is not near - the Cubs didn't win the World Series, although there is still hope for that again before 12/2012 Cub's fans, the Clippers don't appear to be NBA title contenders, and the Bengals really don't seem to be for real. So, from a sports perspective, all signs point to the world continuing. (Yankees, Colts, Pacers if you are wondering my favorite teams)
Now back to the Fed's decision, the world will continue to change for financial institutions in 2012 if the Fed's policy spurs another reduction in mortgage interest rates further amplifying the need to lower expenses and survive on thinner margins. The death of the branch may be even quicker than experts are predicting if this news triggers more downward pressure on loans. Non-interest, non-punitive income will only carry FIs so far. The ability to have better efficiency ratios though expense reductions will be paramount for at least another 2 - 3 years. That kind of pressure will force more and more FI's to really deal with the branch dilemma more quickly than they will want to admit. I know we have that in front of us for 2012 and hope that we will make quick decisions on what our community hub will look like in the future. (I think we have to stop calling them branches, so I will be trying out different names in all of 2012.)
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