Interest rates

The company reported net interest income that slightly missed analyst estimates, a sign the benefit of higher interest rates may be waning amid pressure to pay out more to depositors. Costs rose on higher compensation and an FDIC assessment.

With high deposit and borrowing costs persisting amid the Federal Reserve's campaign against inflation, lenders face stress on their net interest margins and the potential of troubled loans ticking up.

Federal Reserve Bank of New York President John Williams said the economy is headed in the right direction, and it will likely be appropriate to cut interest rates later this year

The Seattle bank's stock price fell in 2023 amid concerns over rising interest rates and its concentration of multifamily loans. The buyer is FirstSun Capital Bancorp, which raised $175 million as part of the deal.

Bank investors hope they can party like it's 1995, when the U.S. economy stayed healthy even after aggressive Federal Reserve rate hikes. But a few analysts are a bit more cautious over whether banks' loan books will hold up as well this time.

The so-called core personal consumption expenditures price index barely rose in November and trailed policymakers' 2% target by one measure, reinforcing the central bank's pivot toward interest-rate cuts next year.

The Bank Term Funding Program, set up in response to this spring's run of bank failures, is poised to close down in March. With the Federal Reserve now forecasting rate cuts next year, the bar for renewing the facility's authorization could be a bit higher.

Remote work trends and high interest rates have substantially reduced the values of U.S. office buildings. A new academic paper estimates the extent of the deterioration, suggesting that there is perhaps more stress ahead for banks than is widely anticipated.

The Federal Reserve has allowed more than $1 trillion of assets to roll off its balance sheet. Chair Jerome Powell says he doesn't believe reserves in the banking system are nearing a level that would cause the Fed to slow down or stop.

The BSBY interest rate benchmark was originally envisioned as a successor to the once-ubiquitous Libor rate. But it failed to gain much traction, and Bloomberg now plans to shut it down next year.