Investment Grade Corporate Bond ETFs experienced their 2nd highest monthly outflows in history last month 👀😱 pic.twitter.com/kIch4yy52b
— Barchart (@Barchart) October 12, 2023
Fed governor Chris Waller compares the run-up in Treasury yields to the bank stress events from March.
The Fed dialed back planned hikes after the SVB-initiated bank stress.
"Now, once again, financial markets are tightening up."
"They're going to do some of the work for us."
— Nick Timiraos (@NickTimiraos) October 11, 2023
Bank Deposit Pressures Could Get Worse, Here’s How
Higher interest rates have hurt bank deposits, and the outlook remains bleak. Investors brace for disappointing bank earnings tied to deposit costs. Despite rate hikes, banks may face further increases, especially if the Federal Reserve sustains elevated rates. A notable gap between deposit costs and federal-funds rate, along with a shift towards interest-paying accounts, exacerbates banks’ challenges. Historical comparisons highlight worsening conditions.