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Higher For Longer | Robert Kaplan, Former Dallas Fed President & CEO
Forward Guidance
The Effect of the Fed's Bond Buyout on Banking Stocks
Banks expanded their balance sheets when interest rates were low, and now, with higher interest rates, they're being squeezed/nBond buying led to a massive increase in bank deposits and banks had to decide what to do with them/nSome banks dramatically increased their whole the maturity accounts and investment accounts, leading to a mismatch issue/nPublic markets marked down every bank with sizable hold the maturity accounts, high percentage of uninsured deposits or high loan to deposit ratios, leading to a dramatic decrease in the market value of banking stocks/nMost public banks are now trading for less than book value, indicating a real loss of capital.
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