Correspondent Blog

Budget, Infrastructure, and Debt Ceiling Drama While yields seek a higher equilibrium level the market will also be keeping an eye out on the discussions in Congress over the fate of President Biden’s budget and infrastructure bills, along with any movement in the debt ceiling drama. House Democratic progressives are demanding that the larger $3.5…

Market Reacts to Powell’s Tapering Clarity The FOMC, rather Fed Chair Jay Powell, delivered a little more certainty in Wednesday’s meeting and press conference in regards to tapering and that certainty helped provide a little more clarity on the rate hikes that might follow. Powell stated that a formal tapering announcement is all but assured…

As we say – every bank must pay for growth. The most obvious case is when a bank hires staff to bring in and service new customers. People. marketing, branches, technology, capital, and many other items are all inputs or investments into growth. The need to grow is probably the single biggest driver for bank…

Competition for quality commercial loans is intense, and currently, the majority of borrowers favor fixed-rate loans for as long as possible.  We cannot blame borrowers for wanting to lock in financing costs at historically low index rates and low credit margins.  After all, the real economic carrying cost for these loans after tax and after…

FOMC Meets as Global Growth Questions Swirl The FOMC meeting concludes this afternoon and we provide some early expectations of what we think we’ll see from the meeting in the sections below. With an updated economic and rate forecast quarter-end meetings always have their fair share of intrigue, even when policy is expected to remain…

Investors Focused on Wednesday’s FOMC Meeting Quarter-end FOMC meetings always carry a bit more drama than other meetings, even when a change in rates or policy are not expected, and this meeting should be no different. With refreshed economic forecasts and the infamous dot plots the meeting will provide plenty of information for investors to…

Upbeat Retail Sales Revives Thoughts of Taper Talk Next Week Just when we thought it safe to conclude taper talks will not be a part of the September FOMC meeting along comes the August Retail Sales Report to bring it back front and center. The sales numbers were better-than-expected and that pressured Treasury prices lower…

Once a loan is booked, it needs to be reviewed over time for changes in credit. The problem is that many banks have only one type of commercial loan review.  This standard review usually requires approximately eight hours of work from credit, loan administration, and management. When this effort is combined with data expense, the…

August Inflation and Retail Sales A couple first-tier economic releases will likely garner the most attention from traders this week as the Fed goes into its quiet period before the September 22 FOMC meeting. First, the August CPI numbers will be released tomorrow and the moderation of springtime price spikes that began in July is…

One trick every bank lender should have up their sleeve is the ability to meet a client’s maturity and amortization targets but limit the risk of the bank by adjusting the rate on a loan. This tactic is especially germane in today’s market as certain sectors in certain cities are likely reaching the end of…

Plenty of Positives Remain in Jobs Picture The August employment report was generally considered a disappointment with headline job growth missing forecasts with 235,000 jobs created versus 733,000 expected. The rise in virus cases gets its fair share of blame, and with Leisure and Hospitality job growth flat versus a 350,000 six-month average, there is…

Every community bank has a set of financial statement reports and ratio analyses to assess underwriting and credit risk.  The advent of credit spreading software such as CreditQuest has made this job very easy.   However, few banks take the extra step of modifying their reports and analysis based on the current economic cycle and market…