'All eyes' on interest rates as banks prepare to report earnings
'All eyes' on interest rates as banks prepare to report earnings
Abstract
Second-quarter results are expected to show increased interest income and profits as the impact of aggressive Federal Reserve rate hikes becomes evident. As rates climb further, depositors will begin to demand higher interest payments as well, eventually driving up banksโ costs. This would come on top of already rising operational and staffing expenses. A recession could easily curb loan demand and drive up credit losses. Analysts expect another 175 basis points of rate increases this year. The rate hikes could follow.
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