What 2026 economic trends mean for credit union strategies

What does the year ahead mean for your credit union and your finances?

By Steve Rick, Director and Chief Economist, TruStage
Additions and edits by Dakota Credit Union Association (DakCU)

As credit unions look ahead to 2026, questions around inflation, interest rates, and economic stability are top of mind for leaders and members alike. Few break down those trends more clearly, or more candidly, than Steve Rick, our longtime favorite economic speaker and a returning highlight at this year’s DakCU's Annual Meeting & Summit in May. In this outlook, Steve shares what’s ahead for the economy in 2026 and what it could mean for credit unions and the members they serve.

As we look ahead, 2026 is shaping up to be a year defined less by extremes and more by steady, careful navigation. Moderate inflation, easing rates, and cautious growth will require credit unions to stay nimble, manage risk thoughtfully, and stay closely aligned with member needs. It’s not a year for panic, or for complacency, but one for smart strategy and intentional decision-making.
 
Inflation: Higher, but manageable
Inflation will likely climb above the Federal Reserve’s two percent target, reaching 3.2 to 3.3 percent in early 2026. Why? Tariffs. Many firms have absorbed tariff costs so far, but they’ll eventually start passing those costs along to consumers. For credit unions, this means members will feel the pinch in everyday expenses, and lending strategies will probably need to adapt.
 
Interest rates: Cuts are coming
After the Fed’s 25-basis-point cut in December, another 50 basis points of easing is possible later this year. The Fed is pulling its foot off the brake and easing out of restrictive territory. For CUs, lower rates could stimulate demand for auto loans and other credit products. That’s good news for loan growth, but it also means tighter margins on deposits.
 
Economic growth: Slow, not stalled
Despite inflationary pressure, I am not forecasting a recession in 2026. Instead, expect below-trend growth. For credit unions, this translates into a stable but cautious environment. Members may not be spending aggressively, but to keep the car analogies going; they’re unlikely to slam the brakes entirely.
 
Stock market: Lofty highs and looming risks
The S&P 500 has soared 16 percent year-to-date, 49 percent over the last two years, and 84 percent over the last five years. That’s created a wealth effect for the top 10 percent of Americans who own most stocks. But there could be trouble looming. Margin debt has ballooned to $1.1 trillion, up 34 percent in a year. If markets correct sharply, consumer confidence could take a hit, and members might pull back on spending and borrowing.
 
Valuation concerns and the AI factor
The Shiller P/E ratio is 41, the second highest level ever. The Shiller Ratio (CAPE) measures stock market value by comparing current prices to the average of 10 years of inflation-adjusted earnings, with higher ratios signaling lower future returns.

Much of the market surge is tied to the “Magnificent Seven” tech stocks and AI optimism. If AI fails to deliver the productivity gains investors expect, a bubble could burst. While I don’t foresee a crash, there are parallels to past speculative periods. For credit unions, a market downturn could mean members shifting focus to savings and liquidity.
 
Nightmare scenarios: What could go wrong?
I’m not forecasting doom, but I am watching several risks: trade wars escalating beyond tariffs, geopolitical shocks such as the Russia-Ukraine conflict spreading, commercial real estate stress with office vacancies and refinancing challenges, and falling home prices in states like Texas, Florida and California, which could ripple into consumer confidence.

Any of these could trigger a recession or at least a sharp slowdown. For CUs, that means preparing for potential spikes in delinquencies and shifts in member behavior.
 
What it all means for credit unions
The big picture? 2026 looks like a year of moderate inflation, easing rates and cautious growth. Credit unions should expect members to feel cost pressures while benefiting from lower borrowing costs. Loan demand—especially autos—may rise, but margins will tighten. Market volatility could influence member sentiment, making liquidity and risk management critical.
 
I am not forecasting a recession—just a little bit below-trend economic growth. For credit unions, that’s a call to stay nimble, focus on member needs and prepare for a year that’s more about managing risk than chasing record growth.
 
This is exactly why Steve Rick’s economic outlooks continue to be a DakCU Annual Meeting & Summit favorite. Catch his insights live when he returns to the Summit stage in Box Elder this May!

The views expressed here are those of the author and do not necessarily represent the views of TruStage.
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TruStage is the marketing name for TruStage Financial Group, Inc. its subsidiaries and affiliates. Corporate headquarters are located in Madison, Wis.

About TruStage
TruStageTM is a financially strong insurance, investment and technology provider, built on the philosophy of people helping people. We believe a brighter financial future should be accessible to everyone, and our products and solutions help people confidently make financial decisions that work for them at every stage of life. With a culture rooted and focused on creating a more equitable society and financial system, we are deeply committed to giving back to our communities to improve the lives of those we serve. For more information, visit www.trustage.com.