Brian Chappatta, Columnist

Big Banks Can’t Escape From the Fed Squeeze

JPMorgan and Wells Fargo join Citigroup in experiencing declining interest margins as rates tumble.

July 16, 2019 at 2:36 PM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

The Fed is pushing net interest margins even tighter. — The Fed is pushing net interest margins even tighter.
Photographer: Nick Yapp/Fox Photos/Getty Images

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Heading into this earnings cycle for the biggest U.S. banks, analysts were already plenty worried about net interest income, which is how much the firms make from customers’ loan payments compared with what they pay on deposits. After all, long-term interest rates have plummeted since the end of last year amid signs of slowing global growth and the Federal Reserve indicating it would soon be cutting its benchmark lending rate.

It turns out they weren’t quite concerned enough.