Banking Under Pressure: The Impact of Rising Rates

This chapter explores the challenges faced by banks due to rising mortgage rates and long-duration assets purchased at lower yields. It highlights the precarious position of major banks, particularly Bank of America and Schwab, amidst interest rate volatility and discusses the implications for their profitability and market adaptation. The conversation also examines the complexities of banks' hedging strategies and the effects on the commercial real estate market, stressing the nuanced realities of delinquency rates and employer response to political constraints.