‘Bread-and-butter” growth expected to rise, American Banks.
As the US economy expands, US banks expect to experience stronger growth from their “bread-and-butter” business of taking deposits and lending money. The Federal Reserve intends to raise interest rates to annihilate the low interest-rate environment- faced by the US banks for the past decade. The net interest income- which is the difference between what banks earn from lending and payout on deposits- is expected to increase alongside. However, it is expected that banks offering floating-rate loans will benefit more. Large banks would benefit either way with both high or low rates from the Fed. The banks now intend to lend more to businesses- that want to build inventories after losing sales to supply chain interruptions.