Go to any bank conference, bank investor gathering or analyst meeting and the hot topic is the slowdown in deposit growth. As the economy keeps rolling and the Federal Reserve continues to raise rates, the topic of a bank’s increasing cost of funds, slowdown in deposit growth and the jump in liability interest rate sensitivity are on everyone’s minds.
Tag: Balance Sheet Management
For any bank not convinced that we face a period of inflation and rising rates, last week was an eye-opener. The 10-year Treasury jumped 21 basis points and the probability higher rates increased. Since rates began to rise in December of 2015, we have now seen a 1.50% increase in rates with four more increases currently built into the market. Outside of the market, the Fed’s Open Market Committee (FOMC) expects another three to four increases in 2019.