Interest rates

The Consumer Financial Protection Bureau issued a mortgage report based on statistics from 2022 and is looking for ways to simplify the refinance process while considering changes to mortgage servicing standards.

The JPMorgan Chase CEO's comments contrast with the consensus view after 5.25 percentage points of hikes that lifted the benchmark rate to 5.5% — the highest level in 22 years. Money markets are pricing in cuts from next year.

A Piper Sandler poll found that 91% of respondents believe that either a mild or severe recession is already reflected in banks' shares. The survey also unveiled that market participants remain concerned mostly about credit quality and aftershocks from surging interest rates.

The Federal Reserve's rate hikes so far are just "catching up," the JPMorgan chairman and CEO says. Dimon predicts inflation will be at 4% early next year and "won't be coming down for a whole bunch of reasons."

Concerns about large unrealized losses on bond investments have receded since the spring banking crisis, but the paper losses have started growing again in recent months. The worries today are less about banks' survival — and more about how much their margins will get squeezed.

When the prices of U.S. goods and services soar, the Federal Reserve tends to raise its benchmark interest rate, and commercial banks are pinched in several fundamental parts of their business.

Consumer loan balances fell in July for the first time since 2020 as banks have tightened lending standards in response to rising rates and jettisoned assets to bolster liquidity and capital levels.

Community bankers anticipate that interest rates could soon level off and the broader economy may avert a downturn as a result. If that forecast proves true, lenders could minimize credit losses and enjoy stronger loan demand than they had expected earlier in the year.

During the recent banking crisis, both businesses and wealth management clients moved their money out of banks. Commercial deposits have since recovered, but those in wealth accounts continue to decline amid fierce competition from both inside and outside the banking system.

The Seattle bank, which has lost about two-thirds of its market value this year, is also said to be considering raising capital and selling assets.

In 18 states, consumers are not allowed to use trained debt resolution professionals to seek relief from their creditors. That needs to change.

Banks locked in funding by offering more enticing rates on certificates of deposit last quarter, but rebuilding liquidity came at a cost. Competition isn't dying down either, with a couple of credit unions floating 6% CD rates.

High interest rates could dampen demand for refinancing, which took a hit during the pandemic-era pause in federal student loan payments. "Curb your enthusiasm," one analyst said.

With LIBOR's long-awaited sunset, the future of interest rate benchmarking must be defined by choice.

In an online commentary published Wednesday, the Atlanta Fed president said he agreed with the view that "the bar to justify further rate hikes is higher than it was a few months ago."

Bank of America had a 55% increase in new clients in May, and the lender is planning to bulk up staffing to keep up with demand. 

Bond traders have overestimated month-over-month headline inflation heading into four of the last seven Consumer Price Index releases, says strategist Raghav Datla.

When the once-ubiquitous interest rate goes away at the end of June, some businesses that have older loans may see a sudden jump in their payments. Banks, lawyers and business leaders are doing last-minute work to avoid that scenario.

Federal Reserve Bank of New York President John Williams says there is no evidence that the COVID-19 pandemic has ended the era of very low interest rates experienced before the crisis, although growth may be slower in the long run.

The regional bank started making moves to protect deposits last year, which prevented steeper declines during a volatile first quarter, CEO Tim Spence says.