In its most recent monthly Economic Update, America’s Credit Unions Chief Economist Curt Long took a look at the data behind the economy and the impact of the war in Iran.
Long began the update by calling attention to the war in Iran, which has resulted in rising energy costs and market volatility. The issue with the geopolitical unrest is that it is so hard to predict what will happen—ACU’s updated forecast “reflects the assumption that there will not be a prolonged and costly war in Iran, but even if that assumption is correct, a lot of uncertainty remains.”
Despite the uncertainty caused by that conflict and the subsequent impact of rising energy costs, Long calls the present momentum of the economy as “relatively strong”, citing the job market settling, consumer delinquencies stabilizing, and continued consumer spending.
ACU’s economists forecast modest growth of real GDP through 2027, but also predict rising inflation. Coupled with the chance of a prolonged conflict with Iran, and it could spell recession. “Our forecast group placed the odds of recession during the next 12 months at 33 percent,” said Long. “That reflects our concerns across a range of issues. In addition to Iran, our forecast group discussed a few other spots of risk: trade and immigration policy, and the possibility of either an AI bust or rapid AI-driven job displacement.”
As for how this materially affects credit unions, ACU predicts increased share growth in 2026 and 2027 as consumers continue to capitalize on a high share rate environment. Delinquencies and charge-offs are expected to remain elevated, but stable.
Long concluded by saying, “As it stands today, the economy’s fundamentals are good. Stable economic growth is a likely outcome. However, inflationary pressures are ramping up again and the Fed is holding the line. Credit unions look well-positioned to manage this uncertainty moving forward.”
To read the full release and watch the video, visit the America’s Credit Unions website.
