Correspondent Blog

All Eyes on Friday’s May Jobs Report This holiday-shortened week will have all eyes already trained on Friday when we get the May Employment Report. The report will likely set the tone for the upcoming June FOMC meeting on the 16th. Will it be a strong result like March or will it be another mediocre…

April Core PCE Could be Biggest in Decades The market awaits the April Personal Income and Spending numbers later this morning but the biggest nugget will be the Core Personal Consumption Expenditures number (Core PCE). This is the Fed’s preferred inflation measure and the expected monthly gain of 0.6% would be the largest monthly gain…

Bank payments are a mess. Every payment method is a different channel. Worse yet, we confuse our customers with different forms, procedures, and jargon. It has been 50 years and we still expect our customers to know the difference between a wire and an ACH. If we can’t talk to customers about it right, we…

Fed Setting the Stage for Big Core PCE Number There has been a lot of Fed Speak this week and it mostly has been focused on the reoccurring theme that near-term inflation indications are transitory and not of long-lived concerns. We think part of the jawboning this week is pointing towards the Friday release of…

Both the Federal National Mortgage Association (Fannie) and the Federal Home Loan Mortgage Corporation (Freddie) have aggressive multifamily lending programs and comprise the bulk of the market. Freddie’s total multifamily finance activity in Q1/21 was $14B, and Fannie Mae’s was $21.5B.  Some bankers complain that taxpayers’ dollars are creating an unfair playing field for financing…

The Market Gets Another Inflation Number This Week After the FOMC minutes last week put a bit of a scare into markets with taper talk mentioned, cooler heads prevailed and Treasuries managed to recoup trading losses from that day and moved further lower in yield as the week concluded and investors became more assured that…

Treasuries Bounce Back After Taper Talk Comment Treasuries have recouped all the selling that came about off the April FOMC minutes from Wednesday afternoon when the mention that tapering might be discussed at an upcoming meeting. That timeframe upset market sensibilities that thought it more a late summer discussion point. Once the realization hit that…

If you are looking to make best-in-class decisions, it pays to have a variety of best-in-class tools at your disposal. Oftentimes, a reason why banks don’t innovate more is that they lack the tools and experience to properly understand the risk and the return. Without a way to quantify the risk, stagnation occurs. As banks…

Treasuries Happy in the Range A slow week of economic data is allowing Treasuries to drift around within the 1.60% – 1.70% range for the 10yr and that is likely to continue for a time. Next week brings personal income and spending numbers for April and the expectation is that they will look a lot…

Our previous publications discussed current banking industry dynamics for loan pricing, how community banks are responding, and some winning strategies for community bankers.  We contend that excess liquidity and tepid loan demand are the main culprits in driving community bank net interest margin (NIM) to the lowest level in recent history.  With loan-to-deposit ratios dropping…

Fed Speakers Get Another Chance to Talk Transitory Inflation After a week of consequential economic data, this week is a bit thin in that respect but we do get some Fed input that will be closely followed by investors.  The minutes from the April 28 FOMC meeting will be released on Wednesday, and while the…

Treasuries Still Standing After CPI and New Supply The Treasury market rather easily absorbed hotter-than-expected CPI and PPI reports, not to mention new 3yr, 10yr, and 30yr supply. So that begs the question, if a red-hot CPI and fresh supply can’t move yields over recent highs what will it take? Maybe today’s retail sales report,…