Skepticism Grows About Higher Fed Rates Helping Banks’ Margins
- JPMorgan, U.S. Bancorp see pressure to reward depositors
- Competition for deposits could ‘rattle’ banks, researcher says
What Signals Are the Fed Sending to the Market?
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When the Federal Reserve raised benchmark interest rates last month, it took North Carolina lender BB&T Corp. less than an hour to announce it was passing that cost along to borrowers. Depositors, however, have yet to see the benefit.
For many investors, such discipline means U.S. banks are about to feast on rising interest rates -- profiting from a fatter margin between what they charge for loans, and the rewards offered depositors who provide the funds. Now, a small but growing chorus of senior executives and analysts is signaling that resolve may fray and that shareholder optimism is too high.