Correspondent Blog

US prudential regulators are clear that after 2021 banks may no longer use USD LIBOR as an index.  The remaining USD LIBOR cash and derivative instruments will continue until June 30, 2023, at which point all USD LIBOR settings are expected to be discontinued, and most legacy LIBOR contracts will be converted to a Fallback…

Supply Chains to Remain Tangled Well into 2022 As you read this the November CPI numbers will likely have been released and will probably signal another month of steamy inflation that will have the Fed poised to increase the pace of tapering at next week’s FOMC meeting. The overall CPI is expected to print the…

Inflation Numbers Likely to Speed Up Tapering Schedule Team Transitory retired from the field of play last week and it could be like the grizzled veteran that saw the handwriting on the wall. We talk here about the upcoming CPI report for November, due on Friday, that we discuss in more detail below. It seems…

Most bankers have a hard enough time lending on real estate, let alone real estate that is not physically there in the “metaverse.” However, before you decide that you NEVER would lend on a virtual property,  consider that the world is changing. Thinking about how you would lend on virtual real estate is an interesting…

November CPI Will Headline a Sparse Week of Data The economic calendar is light this week and the Fed has gone into radio silence mode prior to next week’s FOMC meeting. That leaves the biggest event of the week on Friday with the release of the November CPI Report. While last Friday’s jobs report for…

Historically bankers used the Treasury, FHLB, or swap yield curve to discern the future path of interest rates. At the time of this writing, the three-month Treasury-Bill is yielding four basis points, the two-year note is 0.59%, and the 10-year note is yielding 1.33%. Historically, such a yield curve prognosticated minimal interest rate changes over…

Community banks have historically generated less non-interest or fee income than larger lenders.  One reason for this is the lack of analytics on how fee income translates to revenue and profitability.  While there are many ways that community banks can increase fee income, one specific source of non-interest income should be particularly appealing to community…

We are big fans of data, but recognize that analysis, and presentation of analysis, can lead you astray. Here are 15 (approximately) of our favorite quotes and maxims that we try to keep in mind every day in order to be more effective at banking. Hopefully, this will remind you of old quotes while introducing…

Team Transitory Stands Down It seems you can retire the word transitory from your vocabulary, or at least from the Fed playbook, as Fed Chair Powell declared yesterday in testimony to the Senate Banking Committee.  Powell and Treasury Secretary Janet Yellen were there as required by the CARES Act to update the committee on the…

Markets Reconsider Worst Case Virus Scenario Investors are reconsidering the worst case virus scenario from the new South African variant and that has Treasuries giving back some of their gains from Friday and stocks looking to recapture some  of the losses suffered that day. South African health experts, including the doctor who first went public…

Thanksgiving Week Arrives with Plenty on the Plate With the Thanksgiving holiday on Thursday, and plenty of people taking the whole week off, it still holds plenty of intrigue. It’s just a matter of who will be around to react to it?  The first matter of business will be whether the Build Back Better Bill…

Are Accelerating Wage Gains the Next Inflation Risk? Team Transitory at the Fed continues to doggedly persist in the labeling of supply-constrained price increases as temporary; albeit, with a longer timeline to reverse the trend than was assumed earlier in the year. While we tend to agree with that view, the Fed also has an…