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John Toohig & Nate Stovall: Bank Loan Market Is “Very Frozen”

Forward Guidance

CHAPTER

Declining Margins in Bank Loan Market

This chapter discusses the declining margins in the bank loan market due to rising deposit costs and slowing loan growth. It explores the shift in cash from non-interest-bearing funds to interest-bearing and brokered funds, the impact of deposit beta and future Fed rate hikes, and the rise in long-term interest rates and its impact on borrowers and lenders.

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