QABA - Big Banks Turn Inflationary Lemons Into Lemonade
2024-04-13 07:10:00 ET
Summary
- Big banks benefit from higher interest rates.
- Big lenders have primed investors for that boost to fade.
- Bank valuations have sagged under impending new bank rules known as the Basel Endgame that could raise capital requirements by one-fifth, consequently reducing returns.
By Breakingviews
Big banks benefit from higher interest rates. So the market's assumption that stubbornly high consumer prices will delay rate cuts from the Federal Reserve is no bad thing for investors in JPMorgan ( JPM ), Wells Fargo ( WFC ) and Citigroup ( C ). All three report first-quarter earnings on Friday and are likely to say that shifting monetary policy is working in their favor. Smaller rivals, though, will struggle to turn inflationary lemons into lemonade....
Big Banks Turn Inflationary Lemons Into Lemonade