Page 19 - BusinessWest July 24, 2023

We’ve Got Business Lending
Power.
Commercial Lenders VP Darlene Mark & SVP Rob Chateauneuf, with Commercial Portfolio Officer Catherine Rioux.
Projects We’ve Recently Financed
Commercial Real Estate
$5,600,000
Real Estate Purchase Agawam, MA
Commercial Construction
$400,000
Land Purchase & Development Somers, CT
Commercial Real Estate
$3,746,000
Property Management Springfield & Holyoke, MA
Commercial Term Loan
$76,500
Landscaping Equipment East Longmeadow, MA
Contact our Commercial Lending Team
413-267-1254 or [email protected]
www.monsonsavings.bank
MEMBER FDIC I MEMBER DIF
Kevin O’Connor says rising interest rates have slowed the mortgage business — and destroyed the refi business.
And such adjustments take several forms, they said, including efforts to trade fixed-rate assets for variable-rate assets, initiatives that take time and come with their own set of risks — indeed, rates could, that’s could, go down quickly.
“It certainly doesn’t make up for what we’re losing in mortgages and refis, but it does help,” O’Connor said. “We’re seeing a lot of interest in home-equity loans.”
No Margin for Error
While banks cope with the present, there is just as much discussion, if not more, concerning what will happen next and when conditions will improve for this sector.
And most of that discussion obviously involves the Fed and what will happen with interest rates, because it’s these rates that determine what happens with all those dominoes.
There is some general uncertainty about what the Fed will do, said those we spoke with, because the jury is still out, in some respects and at least in some quarters, on whether it has accomplished its mission when it comes to slowing down the economy and curbing inflation. This uncertainty led to intense discussion at the most recent Fed board meet- ing, Senecal said.
“There are two schools of thought on this. One is, ‘let’s wait and see what our rate increases are doing to the economy, because it’s like steer- ing a battleship — it doesn’t happen right away,’” he told BusinessWest. “So the Fed took this pause trying to gauge what happened, and what happened? Inflation came down little bit; it was up to 6 or 7%, and now it’s 3.5% or 4%. But their goal is to get it to 2%. So do they continue to raise rates and wait to pause, or do they raise and do a long pause to see if inflation comes down to their target level of 2%?”
While inflation slowed in June — the consumer price index rose 0.2% last month and was up 3% from a year ago, the lowest level since March 2021 — core inflation is still running well above the Fed’s 2% target. And Moriarty is among
those saying there is ample
evidence that the Fed still
has work to do to slow the
BusinessWest
On the mortgage side of the equation, there aren’t many options. Senecal said PeoplesBank has been working to acquire mortgages writ- ten in areas that are still relatively hot, such as Cape Cod. Meanwhile, O’Connor said Westfield Bank and insti-
tutions like it are pushing home-equity
loans, and there is a good market for
them as homeowners look to take that
equity and put it back into their homes
or make other large purchases.
“The consensus is that the economy is starting to slow down — not quickly, but
it’s starting to slow down
— and that rate cuts will probably start to happen in 2024 because inflation and economic growth both show signs of slowing down.”
Banks
>>
Continued on page 45
<< BANKING & FINANCE >>
JULY 24, 2023 19