Correspondent Blog

Range-Trading Appears to Lie Ahead Today, we receive a boatload of data headlined by retail sales for December. Other notable reports are industrial production, and the University of Michigan Sentiment survey for January. It’s not likely, however, that any of the new releases will move markets out of their recent ranges prior to the MLK…

Examining Bond Portfolio Trends: Fourth 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 $19.0 billion, or $143 million on average per portfolio.  Twelve months…

Most banks serve a geographical area defined mainly by a political outline, such as a set of counties. Other banks choose less-defined regions, such as the “Tri-city Area” or “Northern Virginia.” While these defined service areas may be fine for marketing purposes, when it comes to operating efficiency, banks may want to think along other…

December CPI Headlines Busy Week While the December jobs report posted solid numbers, probably more important to the Fed’s intentions to possibly hike in March will be what the inflation numbers do between now and then. December CPI will be the first inflation report since last month’s FOMC meeting.  Expectations are that price pressures will…

The FOMC’s recent hawkish pivot and indications of multiple rate hikes in 2022 have created market volatility and an increase in longer-term interest rates. In a period of rapid change (or high volatility), we see about 50% of banks fall into a common trap of mispricing their commercial credits.  This loan pricing mistake does not…

Fed Minutes Might Overshadow December Jobs Report The December jobs report is due out this morning (8:30 ET), but the most consequential market moving event has already occurred and that was the release of the FOMC December minutes on Wednesday. We discuss in more detail below our thoughts on the minutes and what the market…

Banks investing in tech funds were all the rage in 2021, with hundreds of banks getting involved and investing for their first time. The timing was good for almost all these banks as some of these funds produced triple-digit returns. These technology funds are pitched as a great way to earn an above-average return while…

Investors Weigh Virus Impact While Awaiting December Jobs Report The first trading week of the new year arrives and while the December jobs report on Friday will deliver some first-tier economic news, the market will likely be focused early in the week on the developments with the Omicron variant as schools reopen and others return…

The FOMC lowered the Federal Funds target range to 0.00%-to-0.25% in March of 2020, and it has remained there since.  But now, the market is convinced that the FOMC will raise rates in 2022 through 2024 to better align short-term interest rates with expected market conditions.  This pivot by the FOMC has bankers, and customers,…

FOMC Decisions Continue to Ripple Through Markets The market will get to spend its pre-holiday week digesting what was learned from the latest FOMC meeting. That meeting represented a clear shift in the reaction function of the Fed to one of inflation-fighting, first and foremost. With an acceleration of tapering expected to be completed now…

Fed Pivots to Price Stability Mandate for 2022 We mentioned, not long ago, that once inflation had jumped from a business section story to the front pages the Fed would have to be seen as doing something, and Wednesday’s FOMC meeting fulfilled that demand. While Fed Chair Powell’s congressional testimony two weeks ago signaled the…

FOMC Meets to Accelerate Taper and What Else? 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, and with expectations of a faster…