As expected, the Federal Reserve increased interest ratesWednesday—a move that signals confidence in the economy and it won't hurtcredit unions, economists said.

“The Fed's go-slow approach means credit unions can expect the economic environment to be broadlysupportive of more member engagement and of generally favorableoperating results,” said Mike Schenk, CUNA's vice president ofeconomics and statistics.

That doesn't mean that credit unions won't take a hit because ofthe Fed decision. “More credit unions are apt to feel the pinch ofhigher market interest rates, but CUNA economists see healthymembership growth, solid loan growth, higher asset quality, andgenerally favorable earnings results in the coming months,” hesaid.

Schenk said that the Fed's statement suggests one morequarter-point increase in 2017 and three quarter-point moves in2018.

NAFCU's chief economist, Curt Long said the Fed's decision toreduce its balance sheet is a good sign.

“The actions taken by the Fed reflect confidence in the labormarket and a perception that global risks have declined in thefirst six months of the year,” he said. “Nevertheless, the outlookfor the second half is uncertain.”

“Inflation has slowed recently and the debt ceiling debate posespolitical risk,” he added.

Credit unions are likely to continue to see moderate growth,said Brian Turner, president of Meridian Economics, a Plano,Texas-based firm. He said that while loan demand is growing at7.1%, most of that growth is occurring at credit unions with morethan $500 million in assets.

“So, the industry continues to be in a moderate growth stance –despite all the celebration on how strong the industry stats appearto be,” Turner said. “This will continue to proceed for the rest ofthis year but gather more steam during the second half of 2017 andfirst part of 2018.”