The US Fed held the target for the benchmark rate steady at 2.25% to 2.50%. Fed Powell indicated no rate hikes 2019. With rates potentially at their peak for this cycle and future GDP projections declining slashed, this recipe could spell trouble for the bank stocks.
Typically, financial entities like banks, insurance companies, brokerage firm generally benefit from higher interest rates. Increases in interest rates, mean the economy is doing good. Banks make loans to borrowers at a higher rate than non-performing assets such as savings accounts and CDs and profit from the difference. However, in an environment in which the