Bank Deposit Pressures Could Get Worse, Here's How

Higher interest rates have hurt bank deposits, and the outlook remains bleak. Investors brace for disappointing bank earnings tied to deposit costs. Despite rate hikes, banks may face further increases, especially if the Federal Reserve sustains elevated rates. A notable gap between deposit costs and federal-funds rate, along with a shift towards interest-paying accounts, exacerbates banks’ challenges. Historical comparisons highlight worsening conditions.

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