Interest rates

After hikes pinched profits across the industry, a move in the opposite direction could be the start of a more promising trend. But bankers caution that the immediate effects of a September rate cut figure to be small.

In August's roundup of top mortgage news: The Consumer Financial Protection Bureau sides with plaintiffs against Mr. Cooper in alleged "junk fee" lawsuit, updates to 203(k) and more.

While lower rates have piqued borrower interest, most are waiting for some key events to pass before buying or refinancing, originators said.

Lower interest rates could bolster loan demand, credit quality and securities portfolios. But they could also curb lending profitability faster than they ease deposit costs, crimping net interest margins and eating into near-term profits.

Nearly 56,000 home-purchase agreements were voided in June with the underlying cause likely affordability, a Redfin report claims.

The Federal Reserve held firm on its current interest rate levels after its latest meeting, but inflation numbers are leading to talk of potential action in third and fourth quarters.

Rate locks have increased every month this year, but May's pace came in more subdued than early-year numbers, according to Mortgage Capital Trading.

The Federal Open Market Committee held the federal funds rate at current levels, citing "lack of further progress" toward meeting inflation goals.

Banks and other financial market participants have been keyed into the central bank's communications around monetary policy expectations. But in an unpredictable economy, the guidance doesn't always hit the mark.

Citigroup's earnings topped analysts' estimates as corporations tapped markets for financing and consumers leaned on credit cards.

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.