2024-03-27 02:24:48 ET
Summary
- Bank of America's shares have rallied due to expectations of delayed rate cuts by the Federal Reserve.
- The bank's net interest margin pressures are not as pressing as previously thought.
- The U.S. economy's solid performance provides tailwinds for Bank of America's consumer business.
Bank of America ( BAC )’s shares have rallied 10% so far in FY 2024 on expectations that the Federal Reserve will delay its rate pivot and not push for a lower federal fund rates in the very short term. The change in the Fed's tightening policy obviously benefits large Wall Street banks like Bank of America which will allow them to generate stronger net interest income for longer. The U.S. economy is also doing great, despite higher than expected inflation in February, which should also serve to help out Bank of America's consumer business. As a result, I am changing my rating on Bank of America to hold!...
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For further details see:
Bank of America: A Bad Call On My Part (Rating Upgrade)