Rate Hikes Are A Plus For Banks, With An Asterisk

Markit 3.83K Followers Follow Summary Banks just wrapped up a fantastic quarter in which the stars aligned for Wall Street business units, credit and net interest margins. Assuming the Fed eventually acts, rate hikes will be good for most commercial banks. Unlike in 2022 and 2023, I doubt the Fed will be able to hike rates aggressively if inflation breaks to the upside, so I think the yield curve for now will favor banks. In a higher-rate environment, the quality of the deposit franchise becomes increasingly important - not merely the reported cost of deposits in the latest quarter. WANAN YOSSINGKUM/iStock via Getty Images Banks just wrapped up a fantastic quarter in which the stars aligned for Wall Street business units, credit and net interest margins. Loan growth was just okay, but rapid loan growth consumes capital, so the torrent of capital This article was written by Markit 3.83K Followers Follow IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.