Reuters reported the biggest U.S. banks are expected to kick off the earnings season on a sour note next week due to falling interest rates.
The Federal Reserve raised the target range for the federal funds rate to 2% to 2-1/4% in view of realized and expected labor market conditions and inflation.
The Wall Street Journal reported that while the Fed has raised interest rates seven times, banks have not passed those increases on to their depositors, but are offering cash payment to new customers.
The Federal Reserve raised interest rates by a quarter-point, its first rate hike this year, in a decision that was widely anticipated by markets.
The Federal Reserve left interest rates unchanged at its latest meeting and noted the economy slowed down at the end of last year. Stocks traded lower with the DJIA down 220 points by market close.
Reuters reported that major U.S. banks raised their prime rates for the first time since 2006 following a rate hike from the Federal Reserve.
According to Bloomberg, Bank of America says a ‘great divorce’ between the economies of the U.S. and China will fuel global currency and rates markets in 2016.
SNL Financial said new research on the U.S. bank sector indicates that higher interest rates are not a panacea for bank profitability as competition and regulation are likely to limit the benefit of rate increases.
The Wall Street Journal reported that the price of U.S. government debt declined for a second consecutive session, as interest rate sent the yield on the benchmark 10-year note to a one-month high.