Correspondent Blog

To this point, Treasuries have managed to navigate a week that could have put them up against the rocks of higher yields on several occasions, but instead they’ve mostly avoided any major disasters. First, it was a trio of reopening auctions, especially the $38 billion in additional 10-year notes auctioned on Wednesday and $24 billion…

We estimate that approximately 80% of all banks in the country do not have a commercial loan pricing model that adjusts for credit risk, the shape of the yield curve, acquisition costs, maintenance costs, or relationship revenue. However, banks do not need a loan pricing model to eliminate the biggest mistake commonly committed today on…

Investors and the Fed are expecting a pop in inflation shortly from another round of stimulus hitting the economy, as well as continuing improvement in the pandemic, and distressed values from March and April last year rolling out of the YoY calculation. Alas, February CPI arrives as something of a placeholder until the above have…

Stimulus 3.0 and February CPI Report The Senate made quick work of the third stimulus bill passing it on Saturday and now it returns to the House where it will likely be passed without changes and then head to the president’s desk for signing into law. The haggling over stimulus check income limits took some…

There are a handful of banks in this nation that really know their small business or commercial customer. They say they are about service and they actually walk the walk. They deliver superior service compared to the competition and they put the customer in the middle of everything they do. We interviewed five of these…

The February Employment Report beat expectations of 200,000 new jobs with 379,000 jobs created. Private payrolls were even better with 465,000 new jobs. In addition, the prior two months were adjusted higher with 38,000 more jobs than initially reported. We mentioned last month that January is a notoriously difficult month to project even in the…

Capital markets move quickly, and last week the 10-year Treasury yield did not just increase, but it increased by almost 20 basis points in one day. Many pundits and economists will be writing about the cause and impact of rising rates. They will note how the market is now pricing interest rate hikes by the…

Stimulus 3.0 and February Jobs Report With the House having passed it’s version of Stimulus 3.0 on Friday, Senate Democrats look set to take up their version this week. One issue that will have to be addressed between the two bills is the minimum wage provision. It is in the House bill but the Senate…

In the past (HERE), we highlighted how an employee handbook can have a colossal impact on culture that can radically alter your bank’s trajectory. We talked about how culture alone allowed Zingerman’s, a little Michigan deli, to have a worldwide following. We showed employee handbook examples from Netflix, Zappos and Nordstrom to demonstrate how their…

The February bludgeoning in the Treasury market continued yesterday with yearly highs set in the 10-year (1.61%) and the 30-year (2.39%). The 5-year joined the party yesterday leaping 26bps in one day to 0.86%, but that’s 30bps short of the yearly high of 1.16% set exactly one year ago today. Yields came off those mid-day…

Fed Chair Jerome Powell delivered an as expected performance yesterday in his virtual testimony before the Senate Banking Committee. Don’t expect any changes in rates or QE purchases anytime this year, and maybe next year too. Powell emphasized in the Q&A that the labor market is worse than official statistics imply. For example, when including…

A tool that every banker should have at their disposal is the ability to figure out what a statistically valid sample size is from a given population (calculator at the bottom). A simple everyday example is in the case where examiners are coming in and you want to be sure all your wires are BSA…