Marketplace All-in-One Oil flow or oil freeze?
Dec 17, 2025
In this engaging discussion, Justin Ho reveals why bank deposits are rising even as interest rates fall. Elizabeth Troval discusses the implications of the U.S. blockade on Venezuelan oil and its potential benefits for Gulf Coast refiners. Kristen Schwab analyzes the Gap's innovative turnaround strategy amid retail challenges. Mike Baker dives into how private equity is affecting volunteer fire departments by raising software costs, leaving them struggling to manage budgets. Each insight sheds light on the interconnected world of economics.
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Why Deposits Rose During Rate Cuts
- Bank deposits have risen even as Fed cuts rates because customers move cash back from higher-yield investments when market rates fall.
- Banks are slow to lower their own deposit rates and are cautious about lending, often parking funds in short-term treasuries or pursuing M&A instead.
How Banks Should Deploy Growing Deposits
- Park excess deposits in short-term Treasury securities to maintain flexibility under uncertainty.
- Consider using deposits for strategic expansion like opening branches or buying other banks when loan demand is weak.
Gulf Coast's Long Bet On Heavy Crude
- Gulf Coast refiners invested heavily to process heavy Venezuelan crude but later lost supply due to sanctions and mismanagement in Venezuela.
- If sanctions lift, Venezuelan heavy oil could improve refinery margins and lower consumer gasoline costs; a blockade would tighten heavy crude prices and hurt margins.