Fed May Soften Tone From June

Increasing Virus Cases May Give Fed Pause The Fed concludes it’s two-day meeting this afternoon and investors will be looking for a couple things. For one, we think the Fed may well strike a different tone given they have been consistent in their messaging that the direction of public health (i.e., virus cases) will be…

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What Are You Going To Do With Your Savings Accounts?

More than a year ago, the Federal Reserve changed Regulation D, Section 19 to allow an unlimited amount of withdrawals or transfers from a customer’s savings or money market account. Most banks immediately changed their policies to pass on this freedom to their customers. Some banks proactively left the limit in place or modified the…

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FOMC Meeting, GDP, and More Inflation Numbers this Week

FOMC Meeting, GDP, and More Inflation Numbers The FOMC meeting on Wednesday will be viewed more for any change in tone after the recent bout of risk-off activity that sent yields to levels last seen in February as growth prospects were marked down given the increasing delta variant case counts across the globe. While the…

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What Floating Rate Loan Index Should Community Banks Adopt?

Recent regulatory messages have reinforced the importance for commercial banks to prepare for the end of LIBOR after 2021.  However, banks cannot wait until the end of 2021 to find replacement index(es)  because the transition from LIBOR requires changes to systems, vendors, training, and marketing that can take several quarters to finalize and implement.  To…

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Housing Sales Rebound as Mortgage Rates Fall

The housing market has been one of the few sectors that has shown consistent strength from the very beginnings of the recovery after the induced lockdowns of April and May last year. There was, however, some plateauing in sales activity recently, as existing home sales had four straight months of declining sales on a month-over-month…

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Repricing for Lower Growth

The marking down of growth expectations given the increasing virus case counts from the delta variant across the globe has continued to pressure Treasury yields lower. Also contributing to the lower yields was the impression the Fed left on investors minds after its June meeting where they moved forward two rate hikes into 2023. The…

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Attention Turns to Biden’s Bills

Attention Turns to Biden’s Bills After focusing on Fed speak last week the market will turn its attention to the fate of the Biden Administration’s budget, tax, and infrastructure proposals. While the infrastructure plan has bipartisan support it’s very narrow and will require all 10 Republicans who signed onto it to vote for the final…

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Powell Stays on Message but is the Market Listening?

June retail sales numbers will be released later this morning, and expectations are that sales will rebound after the May pause which came after strong March and April numbers. The report, however, like most of the recent economic releases is likely to be given short attention by the market. They are more focused on Fed…

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CPI Numbers Are Flattening Curves

Who thought the hottest inflation numbers in a dozen years would lead to higher yields? Well, if you guessed that you would be only half right. The June CPI numbers were way above expectations, and that did lead to some selling on the short-end as investors brought forward Fed rate-hiking expectations. The longer-end, however, remains…

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Enlisting ARMIES To Drive Bank Innovation

Areas of improvement in banking abound, which is part of the problem. Banks often struggle with how and where to focus their resources to produce innovative products and services. Do you tackle digitizing the consumer loan process, or do you push into cryptocurrencies? Do you introduce a new treasury management product or upgrade your online…

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Find Out Your Cost of Funds Correlation To Help Better Manage The Balance Sheet

Every year we analyze the industry’s cost of funding earning assets (COF) and track how community bank’s COF behaves relative to larger banks and how COF moves with various indices. The information is critical for all banks as it is helpful to understand how sensitive your balance sheet is to rising or falling rates. We…

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Examining Bond Portfolio Trends: Second Quarter 2021

Examining Bond Portfolio Trends: Second Quarter 2021 Beginning in May 2012 we started tracking  portfolio trends of our bond accounting customers here at the Correspondent Division of SouthState Bank.  At present, we account for over 130 client portfolios with a combined book value of $15.8 billion, or $122 million on average per portfolio.  Twelve months…

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