Surprise! Bank stocks could be the best bet heading into the Fed's likely decision to cut rates.
, have warned of the effect on profits if the Fed cut rates this month. A cut can narrow the spread between how much banks pay to borrow money and their profits from loans.
"There's this misguided notion that low interest rates are generally bad for banks and high interest rates are generally good for banks. And we keep trying to remind people that actually what matters is the spread between the long end and the short end," said Sanchez. "You have coupled with that the idea that if interest rates start to go down again, the fee side of their business, which is the other side of their revenue stream, should also experience a boost, because you're going to see more deal-making in an accommodative environment," said Sanchez.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
How crowded trades and a surprise Fed move could trigger a ‘really big, ugly selloff’Wall Street is about as jammed with crowded trades as it’s ever been — retail guys, mutual funds and hedgies, they’re all loading up on the same,...
Read more »
Two dividend stock income ideas as the Fed works against youNo matter how many working years you have ahead of you, you had better get used to the possibility that interest rates could remain very low for decades, says philipvandoorn
Read more »
Asian shares ease into trade talks, Fed testAsian shares slipped on Monday as markets anxiously counted down to a likely cut...
Read more »
Former Fed Chief Yellen Endorses Quarter-Point Rate Cut This WeekFormer Fed Chairwoman Janet Yellen said if she were still at the central bank, she’d vote for a quarter-percentage-point interest-rate cut this week
Read more »
Trump hits the Fed again ahead of rate decision this weekPresident Trump lashed out at the Fed ahead of its July meeting, criticizing it for what he sees as overly restrictive interest rates.
Read more »