In the first half of this episode, Jim Glennon is joined by Jeff McCarty, Kevin Foley, and Alex Hebner to discuss current market conditions, the potential government shutdown, and the Taylor Rule – a formula used to estimate the ideal federal funds rate. The team analyzes Stephen Miran’s public application of the rule and his controversial suggestion that rates should be two points lower than current levels.

Taylor Rule: i=r∗+π+0.5(π−π∗)+0.5(y−y∗)

·     i = Target federal funds rate

·     r* = Equilibrium real interest rate (often assumed to be around 2%)

·     π = Current inflation rate

·     π* = Target inflation rate (commonly 2%)

·     y = Log of real GDP

·      y* = Log of potential GDP (i.e., full employment output)

Later in the episode, Olivia DeLancey joins Jim Glennon to share highlights from the ACUMA Annual Conference. Olivia reflects on the collaborative spirit of credit unions, their focus on member experience, and the marketing challenges faced by credit union loan officers. Her insights emphasize the importance of content strategy and community-driven engagement in the mortgage space.

Tune in to gain valuable insights to help you stay ahead and maximize your profitability in the ever-evolving mortgage landscape.

Optimal Insights Team:

• Jim Glennon, Vice President of Hedging and Trading Client Services
• Jeff McCarty, Vice President of Hedging and Trading Product
• Alex Hebner, Hedge Account Manager
• Kevin Foley, Director of Product Management
• Olivia DeLancey, Director of Communications and Public Relations

Optimal Blue Production Team:

• Executive Producer: Sara Holtz
• Producers: Matt Gilhooly & Hailey Røise

Commentary included in the podcast shall not be construed as, nor is Optimal Blue providing, any legal, trading, hedging, or financial advice.

Mentioned in this episode:

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00:02

Welcome to Optimal Insights, your weekly source for real-time rate data and expert capital markets commentary brought to you by Optimal Blue. Let's dive in and help you maximize your profitability this week.

00:18

Welcome to Optimal Insights. I'm your host, Jim Glennon, Vice President of Hedging and Trading Client Services at Optimal Blue. Our clients and industry partners have long relied on Optimal Blue for trusted insights and commentary. And these podcasts are an evolution of our commitment to keeping the industry informed. Let's dive into today's episode. Hello, welcome everybody. Thank you for being here this afternoon. It is September 29th, a lot to talk about today. So we'll get right into it here in less than two minutes.

00:46

We will have, we'll sit down with Alex, Jeff and Kevin. We're to give you a little education today during our market updates. We'll talk a little bit about what's going on in the market. We'll touch on the government shutdown, but also going to give you a little education on a mainstream wise, probably little known rule called the Taylor rule. It's a bit of math that's used by economists and presumably the Fed to kind of validate where the Fed funds rate is and should be.

01:14

And there's a Stephen Myron put out an article about his calculation of the Taylor rule and kind of validating why he believes that the Fed funds rate should be up to two points lower than where it is today. So stay tuned for that. We'll talk about that here in a few minutes. And then after that, we will talk with Olivia Delancey, our director of communications and PR and also the co-host of the Market Advantage podcast.

01:42

really excited to have her on. She was just at the Acuma conference here in Denver. We'd like to talk to her about what she witnessed there and just kind what is Acuma and how does it relate back to what we all do in the mortgage industry. First, just in the way of data, OBMMI, conventional 30-year, 6.33. We've ticked up a little bit from getting really close to 6%. Ten years at 4.14, might see a little volatility there around

02:11

government shutdown, but historically wouldn't expect big changes in rates there. We're still looking for that 6%, right? You get close to that five handle and we should start to really see an uptick in volume, but we've already been seeing it. We've seen, especially in refis, some pretty good volume increases over the past couple of months now. So hopefully you all are seeing that also, not a big tick up in purchase volume, but that takes a little bit longer to get going, but certainly seeing some increase in refis.

02:40

So yeah, let's go check in with the gang and see what's going on in the economy and with the Taylor rule. Okay, welcome team. Welcome back, welcome back. Good to be here. As always, there's no dearth of things for us to talk about. We were just getting started. So we decided we'd hit the record button and get back into it. we're, mean, few things on the headlines recently, a couple of things that a little bit under the radar that we definitely want to today. Obviously we have the...

03:08

03:36

during that time. So we probably wouldn't expect much this time either, but who knows? Then we've got maybe the unemployment report on Friday. All right. That could happen. Let's talk about that real quick here. I mean, if there's a government shutdown, it's very possible that the BLS will shut down. We won't get a report Friday. markets will operate as normal and we'll get to it when the government reopens or the BLS figures out a way to get the report out. But what are we expecting? Does anybody have the numbers on that?

04:05

It's expected around 45,000. So still pretty anemic in terms of historic numbers, but expecting the probably headline rate to remain low with some of the factors that we've talked about on the show, right? Yes. Are they expecting the rate to tick up? actually haven't looked at that. Or it's still at 4.3. 4.3, it ticked up last month with that massive revision. I don't think that there's an expectation for...

04:32

the actual unemployment rate to take up again as well. Yeah. As you said, Jim, is what we're looking at is probably the rate more because of all the different dynamics around immigration. The number of jobs is just completely different baseline than what we're used to. All right. We're just in a situation where the economy doesn't need to create a ton of new jobs to keep people gainfully employed because we have just a net reduction or at least a net flattening of

05:01

population growth with people leaving the country and the people coming out of college or whatever, kind of replacing them. Interesting deal. Long-term it's not good, but for now, I guess it keeps that rate low enough where the Fed can kind of have their pick between focusing on inflation or focusing on jobs or a little bit focusing probably on just general productivity and GDP right now. that got us waxing a little bit about the Fed meeting a couple of weeks ago, right? We didn't...

05:31

We didn't come around to much discussion around the newest addition to the FOMC, Myron. He had some interesting, he actually showed his work, if you will, on some of the decisions or some of his leanings. We were just chatting about that. Where do we start with that, gentlemen? It was kind of refreshing, I think, to see someone show their work and not just come out from behind the curtain and say, want...

05:57

I should have been a half point cut. disagree with the rest of my colleagues, but he actually has some, I don't know, collegiate math behind his decision. I thought it was pretty interesting. also, I mean, he posted it on social media. He was kind of discussing amongst folks. So it was interesting to see him out there in the public sphere, as someone who's now part of the

06:20

Board of Governors for the Federal Reserve. Maybe just quick backup. Stephen Myron, we've talked about him a little bit on this podcast, just a reminder on who he is. He had published a paper that shortly after Trump was elected, that was about restructuring the global financial system. It had a lot of Trump's ideas, but was this more academic approach to the policies that Trump was.

06:48

you know, looking to implement internationally with tariffs and things like that. He then quickly came on board as the chairman of the White House Economic Council, something like that, whatever that thing is called in the White House with all the economists. He was the leader of that within the administration. And then he kind of had this unique jump over to the Federal Reserve when a seat opened up and

07:13

So sort of maybe straddles a line a little bit between an economist, politician. I think the really interesting thing that he did was he, from like a pure economist standpoint, put out something last week, basically calling for the federal funds rate to be up to two points lower than it is currently, which is a huge, huge drop. And the way that he did that was by using something called the Taylor rule.

07:43

Taylor rule is a formula that allows you to calculate what the federal funds rate should be. So I thought it would be interesting maybe today to walk the audience through how can you calculate what the federal funds rate should be given the current economic environment. And then also just kind of walk through some of Stephen Myron's arguments and offer some feedback, some critiques about that.

08:10

Maybe just to start off, had to, you know, always got to start with my math, with my handy dandy notebook. And so it's a really simple formula really, you know, when you look at it, but the Taylor rule is made up of these variables. So we're calculating I, which is the target federal funds rate. And the inputs to I are R star plus pi plus one half times

08:39

pi minus pi star plus one half times y minus y star. And I'll break down what each of those variables mean and how we go into calculating it. So I here is what we're calculating and that's the federal funds rate. And we can just sort of walk through these variables and Alex, maybe you can help me out with some of the definitions. This r star here, this is our neutral rate. So this is gonna be our rate.

09:07

of economic growth, assuming stable inflation and stable employment. This is the ideal scenario for the Federal Reserve where there's really nothing that they need to do. Right now, that's calculated at about around 1%. Here, we're already starting off at 1%. Next, we have Pi. For whatever reason, they make inflation Pi. This has nothing to do with the- That's 3.14. It's whatever inflation is.

09:36

Right. It has nothing to with the circumference of a circle or anything, but this is inflation. Now we're starting with, again, we've got 1 % with our economic growth and then inflation, which was 2.6-ish. We're up to 3.6. Then we have, this is kind of fancy, but it's really just dividing by two the difference between inflation and then what the target is.

10:03

So inflation is 2.6, the target, this pi star is 2%, that's our target. So, and then we divide it by two. And so that's, you know, we're taking 2.6 minus two divided by two, that's 0.3. So now we're up to 3.9. And then this last one is the output gap. So Alex, do you want to walk everyone through what the output gap means? Sure. It's very similar to how you just explained a deflation, but you know, thinking about the target GDP, why representing a GDP metric there?

10:33

Y is going to be your GDP output as observed over the last 12 months. And then your GDP Y star is going to be your expected GDP values. for a developed economy in the first world, it generally comes out to about 2%. Yep. Thank you. that's our output gap. It's basically a measure of how hot the economy is running versus what its potential is. And so most economists have this at point two. So again, we divide this by two.

11:02

That's a formula. we're at 0.1. You add all these up, there's one, 2.6, 0.3, 0.1, and then you get four. And that's essentially what the federal funds rate is. So that's basically how we use this model. this isn't like the end all be all for the Federal Reserve, but this is something that they do use. It's somebody's theory, right? It generally works out when you do the math. Yeah.

11:30

Well, I mean, just real quickly to maybe dumb that down a little bit is the idea, especially kind of those last two terms is our kind of averaging measurements of the economy overheating, whether it's through inflation or through output, right? And so as you get higher numbers from overheating from either of those, you're going to have a higher interest rate, which is what we always talk about intuitively, know, raise rates when the economy is overheating, lower rates when, you know, the economy is struggling or we're not getting

11:58

a little bit of inflation or output growth. Yeah. think that's a perfect way to put it is, is the economy overheating or is it under-heating, cooling? So it's just a formulaic way to get to some of those numbers that has become mainstream in the economic community. It's a pretty good formulaic back in the napkin approach to figure out what a good interest rate is. Yeah. A good way to test where we're at, I suppose. And in that case, with the numbers you just said.

12:28

Kevin were perfect. yeah. this is again, it's, it's, this is sort of, you know, what, what you would say that like the CBO, the congressional budget office publishes some of these metrics and, know, so they're, they're all sort of out there. They're, you know, they're referenced by existing fed members and some of the things that they publish. But what was interesting was Stephen Myron went pretty deep on this and we won't go like all the way down into, you know, some of the weeds and

12:57

what he put together, he put together his own Taylor rule and he adjusted some of the numbers based on what he's seeing in terms of economic growth and inflation and basically came up with a much lower number around 2%, which would be substantially lower than what it is now. Now, keep in mind from our last episode, Stephen Myron sort of straddling that like economist, politician, there's

13:26

one foot in each of those spaces. We talked a lot last week about we're trying to get interest rates down because we have all this debt that we want to roll over in the next year. so, potentially, that's filtering into the arguments. I always appreciate someone who shows the math. And their rationalization, right? So obviously, some of the numbers in here are not transparent. They're subjective. It's not just like go to the newspaper, pull these numbers in. Otherwise, we'd all get the same answer, right? Stephen Myron is getting a very different answer by

13:56

changing a couple of those numbers or seeing things like inflation very differently than what the headlines would suggest, right? Is that what we're saying? Yep, yep, 100%. And so let's walk through a couple of his arguments so that we can sort of understand his thinking and then see kind of where things go. So the first thing that he mentions is rental inflation is declining. So the way that we measure rental inflation, it's a lagging indicator means it's more

14:25

14:52

would see that more in around at around 1 % and that could reduce our, if we just looked at what that long running inflation metric projected would be, that would reduce our headline inflation by about 0.3, 0.4 percentage points. And so that's one big argument on the inflation side. Another one is population growth, which Jim, you mentioned it already, the Pew research, they've estimated 1.5

15:19

15:44

There are, there's a few other examples that he talks about the big, beautiful bill that was passed this summer and how deregulatory capabilities within the big, beautiful bill will expand our potential GDP where, now our output gap instead of being positive is actually negative because our potential economic growth is much greater because a lot of these policies within the big, beautiful bill and yada, yada, yada eventually get to two percent.

16:12

It's a very, very interesting example. I actually want to give him a lot of credit for putting this out there publicly. I personally feel that in a world that's dominated by social media, politicians, being out there in public helps build trust in a way where if you're not really out there regularly engaging with the public and can sort of feel like you're in your ivory tower, if you will, and hiding behind bureaucracy or what have you.

16:42

The fact that he's out there engaging with folks, definitely give them a lot of credit for it. Yeah. No, think it's hopefully a bit of a trend. I think it is refreshing to see that. And it was something that was very, very well put together. There's already been some articles written that are in defense of the 4 % versus his roughly 2 % model. And I think you'll continue to see that, but hopefully that's again, a bit of a trend where a lot of these decisions are made more transparent.

17:11

So think at the very least, was fun to see that and try to wrap our own brains around that math. I don't know that anyone has invoked the Taylor rule in decades, maybe ever publicly. Yeah. I think all these economists have some version of it. All the Fed governors have some offices have some version of it that they are using on the backend to figure out the expected. But yes, to so publicly talk about it was certainly interesting.

17:37

And to so publicly question the assumptions, think it'll force the hand of anyone who disagrees to show their math as Kevin's saying. Yep. And I think honestly, that debate publicly is probably a good thing because there are some times when folks get things wrong. And so if you're out there having that debate publicly, I personally think that it's a net positive. m

18:02

If I had to take a critical eye to some of the claims that are being made within the Taylor rule, it might look something like the impression that I'm getting at least is, let's just take the two examples that I went over. Rental inflation expected to decline and then we talked about the population growth also declining. The two items here are both contributing to a lower federal funds rate. My criticism might be that with

18:31

18:58

with the population growth declining, we're looking at today's value. So he's sort of mixing and matching. You we're going to look at a future value where it's going to help the federal funds rate get lower, but we're going to look at today's value in other places where it helps the federal funds rate go lower. But for instance, I don't think that it's, anyone would say that it's economically sustainable long-term to have 2 million people leaving the country every year. That's obviously, that's a short-term phenomenon. It's probably going to level off at some point.

19:28

and setting the policy rates to what's happening just this year may not make a lot of sense. That's a full start to finish of Taylor Rule, had a chance to whip out my old CFA notebook, which actually does have, believe it or not, a lot of my writings from like 12 years ago. Go through the Taylor Rule, go through Stephen Myron, what he's talking about.

19:55

offer a little bit of criticism, but also I think a lot of praise for putting something out there. And I thought it was probably the most interesting economic news of last week. Yeah. I mean, we obviously in this industry, we root for rates to be lower. And if we would like some of Myron's projections to be right, but they are just that, their projections. And that's why some people are taking exception to his math as you are. But it's possible that other members of the FOMC are taking kind of maybe a two.

20:25

a two present day look at the numbers that's been mentioned before, right? Maybe you're not thinking enough ahead to get more in line with a Myron or maybe something, you know, hopefully we get somewhere in the middle and that tends to be the way these things go. And you have an outlier, you start to pull the average a little bit closer as people are forced to, I don't know, check their math or, or start to, to maybe concede that, that maybe we are a little bit behind the eight ball. And, and I'll, I'll just add onto the point that you're making Jim, is which

20:53

time period should the Fed be looking at when they're trying to set their rates? I don't know that that's something that's solidified. One is Jane Agder, just from the Cleveland head president spoke, I think this morning, not a voting member, but she was just talking about how the labor market looks reasonably healthy and broadly in balance while inflation remains stubbornly high. And she doesn't see expected prices to fall back to 2 % until

21:23

21:51

acting like a dove, right? We're still lowering, I mean, they're lowering interest rates and presumably uh in a cycle where they were continued to low rates, not at the pace and levels that Myron is suggesting, but we have at least two two rate cuts priced in through our two Fed announcements through the end of the year. So, we have a lot of folks on the Fed saying things like the Cleveland president said, screeching like a hawk.

22:17

But yeah, acting like a dove while continuing to lower rates. I thought those were a couple of interesting anecdotes. It is. It's like we're trying to will that inflation number lower, but meanwhile, we've proven time and time again that we're really bad at forecasting inflation and how stubborn it can be. I think that's what everybody's worried about. I believe even the administration is worried about it, but they're not letting on to that fact because they're really just pushing for that lower rate to see what happens. think they're willing to take that risk, whereas the Fed is not.

22:47

23:17

that are out there. Then this big, beautiful bill is built in there somewhere and a lot of conjecture around that apparently. It's one of the biggest spending bills that's ever existed. We're trying to predict what the effects of it are going to be in the medium run, one and a half to four years in the future. Myron's waiting that more so than potentially the other members of the FOMC, but again, maybe we should be somewhere in the middle of these two places.

23:47

All right. Anything else on that? mean, just, you know, look for other things, whether it's on social media or mainstream media about inflation expectations, growth expectations, and people invoking the, mentioning the Taylor rule. Cause I think you'll start to maybe see more of that math out there, you know, on TikTok or whatever the, whatever the young people are watching. it makes it to TikTok, then we know it's all over. That's probably true. Then you got to watch out who posted that thing. So there's,

24:16

There's a lot of manipulation going on out there in the social media space, especially on the TikTok from what I'm told. Yeah. All right. Otherwise, yeah, we may have unemployment this week, may not, but if it does come out, it's the number to watch, right? If we see the unemployment rate tick up above 4.3 or we see a zero or negative job creation number, that really could change expectations for what we see in the October Fed meeting. And if there is a shutdown, just...

24:45

lean on the ADP, the private payroll numbers that'll come out on Wednesday. So that will come out either way. Good call. That's been a little, I don't know, maybe a little bit more reliable lately, a little more indicative of BLS. hasn't matched it nearly. Yeah. I'd say like the first half of the year, it struggled to keep pace with the swings in the BLS number, but it's tightened up in the last few months. Historically, there have been periods where it's separated quite a bit. Then as far as the shutdown history tells us, we don't get much of a change in rates.

25:15

Although the last time we got a few basis points lower, to me, uh there's two forces acting. There's one that says the government is in a bit of turmoil, so yield should go up. If it was any other country, that may be what happens. But because we're also the safe haven, our treasuries are a safe haven, you get people investing in treasuries and it pushes, it keeps that rate low. Again, I wouldn't expect, based on history, a ton of movement, but I wouldn't expect rates to jump nor plummet.

25:44

uh if and when the government shuts down Tuesday night. So be watching Tuesday night. If the chambers haven't figured it out by then and made it come to an agreement, there will be furloughs. There will be headlines about it, but it's just, you know, if you're not a government worker, it's kind of, you know, wait and see how long it takes to get it all figured out.

26:05

All right. Anything else? Any other big numbers we should be watching this week? No, it's really just employment this week. There were some pending home sales this morning that were a little impressive. It's kind of rounding off the busy summer season with a 0.4 % jump in August, but now the biggest numbers this week will be employment for the full economy. All right. Sounds good. Great catch up gentlemen. Thanks for the time. Thanks for the wisdom. Yeah. Thank you Kevin. Thanks guys. Take care guys. Okay. As promised, Olivia Delancey.

26:35

Optimal Blues Director of Communications and PR. Welcome, Olivia. Good to have you on here. Hey, Jim. Good to see you. It was also great to see you in person last week. Yes. Yes. That's what we're here to talk about, right? You came out to the Acuma Conference. many of our listeners are not aware, Acuma is a trade organization, kind of like the MBA for credit unions is how I think about them, right? It's the American Credit Union Mortgage Association.

27:04

Their annual conference, it's one of those that moves around kind of like the MBA conferences, but it was here in Denver. Olivia attended and spoke uh on a panel and had also, I believe this is your first time attending that conference? Second, actually. Second time attending that conference. So we just wanted to have you on to give some observations, right? mean, we attend that conference.

27:30

pretty aggressively over the years. have really good relationships with a lot of credit unions. It's honestly an area I'd like to focus on more. And I think we're going to continue to kind of ramp up our ability to better support credit unions through our pricing engine, but also our hedging software, you know, on the desk where I reside. I've always thought that there is just a bit of a separation between like the IMB, the independent mortgage bank, and then banks and credit unions on the other side.

28:00

Right. And they all, we're all producing the same things. We're producing mortgage loans. We're supporting our customers through purchases and refis, you know, and supporting the, in that way we're supporting home ownership. We're also supporting just affordability and ways to unlock equity and things like that. But I feel like the IMBs and the credit unions go about things very differently. And I've always felt that they could, I don't know, collaborate more with one another and I'll get to that here in a little bit, but just so.

28:29

listeners and we kind of understand what happens at these things. Like what did you observe and what were any of your takeaways from the conference? Yeah, yeah. Well, thank you so much for having me. The Acuba event is actually one of my favorites and I really like the credit union group and I'll tell you why. They're all about collaboration in relationships and community. So credit unions are really big on best practice sharing.

28:57

They don't like to hoard knowledge. They're not competitive. They learn something and they immediately want to share that knowledge with one another to help, you know, the next person do the same thing, succeed alongside them. And you definitely feel that at these events. It's kind of like stepping into a community. I actually noted a quote that I saw online in relation to this event. So,

29:24

It was like 600 mortgage professionals who feel more like coworkers than competitors. And on that note, there were over 600 people at the event and it was actually the best attended Acuma annual event on record. So that tells you a lot. These credit union mortgage professionals really value what they get out of attending this event. And we'll see maybe next year will be another record setting year. So a few other observations and things I heard.

29:54

people really valued the sessions because they felt like they were hearing practical knowledge. There's a big focus on regulations and compliance within the credit union world, huge focus on the member experience. So whereas on the other side of the fence, we hear a lot about profitability, operational efficiency, credit unions are all about that member relationship, serving the members, serving their communities. Just really interesting to hear.

30:22

the different conversations that come along with that. So the panel that I got to sit on, which was a lot of fun, by the way, it was about marketing. So it was focused on the sales side of the house. So the loan, the credit union loan officer and how they are essentially putting their personal brand out there to reach members in the community. And apparently there is a large challenge among this group about kind of getting in their own way. So they're a little too worried about

30:50

Am I going to step out of regulatory bounds? Am I going to say the wrong thing? I don't know what type of content to produce. Where do I start? I'm not a professional marketer. So what I really stepped into that panel hoping to bring was a content perspective because that's my background. So my advice there was start with what you know. You don't have to be an expert in any of these things. Just think about what your

31:17

target audience is asking you day to day and go from there. So it was a lot of fun. I hope that the audience got something out of our session. I really enjoyed it. Really enjoyed the whole event. Was super, super happy to attend and especially, you know, a chance to come to Denver is always, always welcomed for sure. And great to see you in your group too. So sure, sure. No, that's great. I think, you know, I know you and I were talking in the office about your session. I think you, definitely brought a good amount of wisdom there and a

31:47

You've got a good kind of view of all the different types of mortgage lenders that are out there. And you can bring that, some of that, I don't know, that knowledge or some of those strategies into that marketing conversation. Cause I, again, I think this might be a controversy you'll take, but I think that the independent mortgage banks could learn a thing or two from the credit unions. think collaboration is a huge one that you hit on earlier, right? I think on the, in the IMB space and maybe rightfully so there's

32:16

a bit more of isolationism, right? They don't want to share their ideas with the next, with the competitor. But at the same time, a rising tide lifts all boats, right? We could all be more efficient if we all kind of shared what works and what doesn't. And we see that, you know, it depends on, like we have our events. We have our summit coming up here in February. And that's an event where I've certainly witnessed all types of clients getting together and collaborating and kind of letting their guard down, right? In that sort of venue. Whereas probably when they leave, they go back to

32:46

They grab their shields and their swords and they're fighting with each other. But again, it feels like something where the credit unions maybe have it right. When they find something that makes sense or that works, whether it's a strategy or a piece of software or another piece of their arsenal, they're sharing it with their competitors. At the same time, think credit unions could learn some things from the IMBs. The IMBs most of them, solely on mortgage lending. Purchase, refi business.

33:15

bringing it in the door, getting it done efficiently. Whereas credit unions, a lot of times the credit union has many different products they sell to their members, very focused on the experience, but maybe don't focus enough on mortgage or maybe that division kind of finds themselves jockeying for position or resources or funds or focus. And they could maybe learn some things from the IMB community. That's not going to happen as much at an Acuma. Acuma is kind of where you go with your peers and 600 people is an enormous.

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conference to learn just the best of the best that people are operating on in the credit union space. When you come to something like a summit, like our event, and you can rub elbows with folks of just totally different structures and strategies. I think that that's, probably want to be, if you can swing it, you probably want to be doing all those things. You want to go to major mortgage industry conferences as well as some of this credit union stuff. yeah, you kind of validated, have we felt on the desk about this? Cause we have all types of clients that we work with.

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hedging, right? We have tons of IMBs. A majority of our clients are IMBs because they're looking to be as efficient and maximize profitability and maximize margin strategies and things like this. So they're all delivering mandatory and hedging their pipeline, whereas credit unions tend to be a little bit more conservative. So some of them, you you say the word hedging and they're a little bit worried that maybe it's risky. If done right, it's not. That's kind of the point of hedging is that you're remaining neutral.

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Right? So we have over the years, we have a higher and higher percentage of credit union customers that work with us on our trade desk because they've been sharing that strategy amongst themselves, amongst the other credit unions and really starting to adopt more of our software from our PPE down also to our capital markets solutions.

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Jim, we had a few representatives from the hedging and trading desk join us at a client dinner. It's nice to have hedging and trading represented among the credit union dinner. Beautiful. Yeah, I heard it was a real nice dinner right down the street, again, from our office in Denver. Yeah, that's to me the biggest piece of working with OB or working with your hedge provider, uh with your...

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then with your partners is that relationship, right? The relationship piece and having, you know, sitting down and having a meal with somebody is sometimes the best way to connect with them or to know what they need or to, you know, have a constructive conversation. And also again, these dinners are very collaborative. Folks are sitting next to their competitors and having reasonable kind of guard down conversations. So I think that the advice here at Credit Unions is if you are not registered for our summit yet, you should come and show

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show our other types of lenders what that means to really be collaborative and relationship oriented and maybe learn a few things along the way that you can take back to your credit union peers. That's, know, I think conferences have sort of in my mind have morphed over the years and, know, the sessions and everything are great in terms of taking notes and getting good education. But a huge part of them is just being in one place at one time in person, which is something that we lost like during the pandemic, for instance. And when we came back, it feels like there was more of this

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this hunger to get out there and meet with other folks that are in the same business you are and finding out what they're doing and how it's working for them. especially in the technology space, it moves so quickly and evolves so quickly. You really want to be sure you're not missing any opportunities. That's right. All right. Olivia, thank you so much. Olivia, Director of Communications and PR and co-host of the Market Advantage podcast.

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Please do check that out if you haven't, that comes out once a month along with our market advantage report. And we will see you again soon, Olivia. Thanks so much for being here. Thanks, Jim. See you next time. Wow. Another great episode. Let's wrap this thing up. Big thanks to Alex, Jeff, Kevin, and Olivia. Great episode, great content, great insight. Appreciate you all being on. I appreciate everybody listening. That's it for today.

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Join us next week for another episode of Optimal Insights, where we'll continue to provide you with the latest market analysis and insights to help you stay ahead. Check out our full videos on YouTube. You can also find each episode on all major podcast platforms. Thanks again for tuning in to Optimal Insights.

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