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Pod 22: 5.0% CPI, the Macro + banking landscape, rate hikes or pauses, the federal reserve's decisions and inflation

Unusual Whales

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The Importance of Deposit Rates in Banking

A bank is not necessarily going to voluntarily give up their own margin by raising their deposit or rate on demand deposits. But I do think that you see a competition for deposits in the form of time deposits, so not immediately, withdrawalable, but basically CDs or things to that extent. At some point, if you do have an issue that you've got big HTM losses and that's okay as long as you don't have deposit flight, then you sort of have to make a management decision about whether you want to.

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