QuantyPhi Quarterly
A Message from the President
As we close the second quarter of 2025, I am thrilled to share some exciting developments at QuantyPhi that will significantly enhance our service offerings and support your credit union's strategic goals.
We are on the brink of launching our new Integrated Balance Sheet Management Platform. This innovative platform will revolutionize how you manage your balance sheet by integrating ALM modeling, liquidity risk management, CECL modeling, a loan trading marketplace, and an investment trading marketplace. By utilizing the same data and analytics across these functions, your credit union will be empowered to make more informed and strategic decisions. This comprehensive approach ensures that all aspects of your balance sheet are aligned and optimized for performance and risk management.
In addition to this groundbreaking platform, we continue to offer our CECL Validation Service. This service is designed to ensure your credit union's compliance with the Current Expected Credit Loss (CECL) accounting standard. Our thorough review and validation process will help you navigate the complexities of CECL implementation with confidence, ensuring accuracy and regulatory compliance.
Our commitment to providing exceptional consulting services remains unwavering. Whether it's ALM Modeling, ALM Validations, Liquidity Framework Reviews, Non-Maturity Deposit Studies, or Mortgage Servicing Rights Valuations, our team of experts is here to support you every step of the way. We understand the unique challenges credit unions face and are dedicated to delivering tailored solutions that enhance your financial stability and performance.
At QuantyPhi, our dedication to serving our members is at the heart of everything we do. We are proud to offer innovative solutions that not only meet your needs but also help you thrive in an ever-evolving financial landscape. Your success is our success, and we are committed to being your trusted partner in achieving your strategic objectives.
Thank you for your continued trust and partnership. We look forward to working with you and supporting your credit union's growth and success.
Warm regards,
Adam Stone
President of QuantyPhi
Innovative Solutions for a Thriving Credit Union
A better analysis for mortgage servicing rights.
Mortgage servicing rights (MSR) let loan originators sell mortgage loans while keeping the administrative tasks, providing a steady revenue stream. The fair market value of MSR can fluctuate, and changes in rates can change the life of the servicing, creating more or less income potential. QuantyPhi can provide an independent assessment of the value of your credit union's MSR asset.
Is your credit union's less expensive funding likely to remain available?
With rate changes anticipated, now is the time to recalibrate your model assumptions. QuantyPhi can provide an independent assessment of your credit union's deposit behavior to help ensure your ALM model is accurately reflecting the risks in your balance sheet.
CECL Validations from a CUSO you trust.
The Current Expected Credit Loss (CECL) standard requires institutions to estimate expected credit losses over the life of a loan at origination. QuantyPhi's CECL Validation Service provides an independent review of your credit union's CECL methodology, assumptions, and documentation to help ensure compliance with the accounting standard.
Market Commentary
Fed Funds Futures and the Grand Prize Game
By: Wade Cooper, MBA, Financial Strategist
The Fed Funds Futures market and the Grand Prize Game from The Bozo Show might seem worlds apart—one is a financial instrument used by traders and economists, the other a beloved children's game show segment. But they share a surprisingly apt metaphorical connection when it comes to predicting outcomes over increasing distances.
The Grand Prize Game: A Quick Refresher
In the Grand Prize Game, a child would toss ping pong balls into a series of buckets, each placed farther away than the last. The fabulous prizes increased in value with success—the final bucket containing a crisp $50 bill and the promise of a brand-new Schwinn bicycle. The first few buckets were relatively easy, but as the distance increased, the difficulty—and the likelihood of missing—grew dramatically.
Fed Funds Futures
A similar pattern, Fed Funds Futures work in a remarkably similar way. These contracts reflect market expectations for where the federal funds rate will be at specific points in the future. Like the first few buckets in the game, near-term contracts are relatively accurate. As the forecast horizon extends—three, six, or twelve months out—the accuracy of these predictions drops sharply.
A current example illustrates this well. As of this writing, Fed Funds Futures predict a 97.8% probability that rates will remain unchanged at the June 18 FOMC meeting, with only a 2.2% chance of a 25-basis point rate cut. Just one month ago, the market was far less certain: it priced in a 6.6% chance of a 50-basis point cut, a 57.2% chance of a 25-basis point cut, and only a 36.7% chance of no change.
The Takeaway
Just like a child tossing a ping pong ball toward a distant bucket, traders and analysts are making educated guesses about where interest rates will land months or years from now. And just like in the Grand Prize Game, the further out they aim, the more likely they are to miss. So, while the Fed Funds Futures market is a useful tool, it's important to remember: it's not a guarantee—it's a game of probabilities. And the farther the bucket, the harder the shot.
Events
Navigating Interest Rate Risk Webinar Series
Join us for our monthly webinar series, held on the third Thursday of each month. Each 45-minute session explores challenges facing credit union managers and shares practical approaches to navigating today's financial landscape.
Session Highlights:
- Interest rate risk management strategies
- Liquidity planning and stress testing
- ALM model validation best practices
- Regulatory updates and compliance considerations
- Q&A with QuantyPhi's financial strategists
2025 Event Schedule
QuantyPhi will be attending the following credit union league conventions in 2025. Stop by our booth to learn more about our services and meet our team!
- Michigan Credit Union League Convention – Grand Rapids, MI
- Nebraska Credit Union League Convention – Omaha, NE
- Iowa Credit Union League Convention – Des Moines, IA
- Wisconsin Credit Union League Convention – Wisconsin Dells, WI
- Illinois Credit Union League Convention – Springfield, IL
QuantyPhi is Hiring
We're looking for an ALM & Investment Analyst to join our growing team. This position is ideal for someone with experience in asset/liability management, investment analysis, or financial modeling who is passionate about serving credit unions.
At QuantyPhi, we pride ourselves on creating a collaborative and supportive work environment. Our team members enjoy competitive compensation, comprehensive benefits, and the opportunity to make a meaningful impact in the credit union movement.
If you're ready to take the next step in your career and want to work with a team that's dedicated to helping credit unions thrive, we'd love to hear from you.
Financial Reads
Are you looking for some good reading that might help you at work too?
The Revolution That Wasn't: GameStop, Reddit, and the Fleecing of Small Investors
Author, Spencer Jakab, examines the GameStop short squeeze of 2021 and the broader implications for retail investing. The book explores how social media-driven investing can create both opportunities and risks for individual investors, and questions whether the "democratization" of trading has truly leveled the playing field.
The Snowball: Warren Buffett and the Business of Life
Author, Alice Schroeder, provides an authorized biography of Warren Buffett, offering insights into his investment philosophy, personal life, and the principles that guided his success. The book draws its title from Buffett's own metaphor: "Life is like a snowball. The important thing is finding wet snow and a really long hill."
The Currency of Politics: The Political Theory of Money from Aristotle to Keynes
Author, Stefan Eich, explores the political dimensions of money throughout history, arguing that money has always been a tool of political power and not merely an economic instrument. The book traces how thinkers from Aristotle to Keynes have grappled with questions about who should control money and for what purposes.
For more investment reads, check out our QuantyPhi Reads selection.
Spotlight on SimpliCD
SimpliCD Investments: No safekeeping fees.
SimpliCD continues to provide credit unions with a cost-effective solution for CD investments. Unlike traditional DTC CDs that often come with safekeeping fees, SimpliCD investments have no safekeeping fees—keeping more of your returns working for your credit union.
With SimpliCD, you can invest in CDs issued by other credit unions, earning competitive rates while supporting the credit union movement. It's a win-win for your credit union and the broader cooperative system.
Stay Up to Date with QuantyPhi
Sign up to receive announcements and other notifications from QuantyPhi.