SGOV - Status Of Banks' Unrealized Losses In Q1 Worsened After Brief Rate Cut Mania Relief
2024-05-30 04:10:00 ET
Summary
- In Q1 2024, unrealized losses on securities held by commercial banks increased by $39 billion from Q4 to a cumulative loss of $517 billion.
- The securities are mostly Treasury securities and government-guaranteed MBS that don’t produce credit losses, unlike loans where banks have been taking credit losses, particularly in commercial real estate loans.
- Yields on longer-term securities began plunging in November and bottomed out early this year amid general Rate-Cut Mania.
Rate-cut-mania soothed the pain, but it's over.
In Q1 2024, "unrealized losses" on securities held by commercial banks increased by $39 billion (or by 8.1%) from Q4 to a cumulative loss of $517 billion. These unrealized losses amount to 9.4% of the $5.47 trillion in securities held by those banks, according to today's FDIC's quarterly bank data for Q1....
Status Of Banks' Unrealized Losses In Q1 Worsened After Brief Rate Cut Mania Relief