Interest rates

Several small and midsize banks say they are losing borrowers to rivals and worry the trend could get worse as interest rates decline.

The Columbus, Ohio, company said Thursday that it expects the Federal Reserve to cut interest rates twice this year and two more times in 2020.

Second-quarter earnings at the Chicago custody bank were flat as increased interest costs offset better yields and fee income held steady.

KeyCorp, Regions Financial and others have sacrificed short-term profits to avoid being crushed by an anticipated decline in interest rates.

The Birmingham, Ala., company warned in its earnings call that moves by the central bank could make it harder to lower costs.

The company could rein in deposit costs, cut operational expenses and buy back more shares in anticipation of a Federal Reserve rate reduction. Other banks — especially big ones — could do the same.

Interest rates on CDs of six-months or longer have declined since a Federal Reserve meeting in June, according to Moebs Services.

Christopher Waller is a conventional choice drawn from within the Fed’s own ranks. Judy Shelton has spent decades outside mainstream economics. But both are expected to echo the president’s call for lowering interest rates.

The president said that European Central Bank President Mario Draghi would do a better job overseeing monetary policy in the U.S. than Fed Chairman Jerome Powell.

Regional and small banks are striking digital partnerships and launching new savings offerings as they attempt to steal away business from bigger institutions.