4min chapter

Forward Guidance cover image

Commercial Banks Taper Treasury Purchases | Joseph Wang & DC Analyst

Forward Guidance

CHAPTER

Bank Stocks Are Going to Get Wracked

When the Fed raises rates, it could actually potentially make the RRP go higher. By historical standards, banks net interest margins are still quite low. Banks have been flooded with deposits since 2020. Deposits have grown across the board by like 50%. So, and since there weren't really many high yielding opportunities during that time, much of that growth in deposits has been invested into fairly low yielding assets at the front end.

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