Correspondent Blog

Powell & Yellen To Testify on Capitol Hill Fed Chair Jerome Powell and Treasury Secretary Janet Yellen will appear twice this week on Capitol Hill to deliver a quarterly update on the CARES Act legislation. The Tuesday session will be before the House Financial Services Committee while Wednesday they will be in front of the…

This year may be the right time for your bank to embrace a loan hedging program.  With the economy recovering from a pandemic and the possibility of stoking inflation, banks that can offer borrowers more flexible loan structures may be in a better position to win more and better quality loans.  While the Federal Reserve…

The FOMC meeting is now behind us, and while  there was not much change to existing monetary policy there is still plenty we learned from the statement, the Summary of Economic Projections, the dot plot of fed funds rates, and the Q&A at the Powell press conference. In fact, we think it was one of…

The FOMC meeting today will offer investors the full panoply of Fed resources from which it impacts the market. While there is no change in policy expected, nor any indication that a change is coming in the near future, they will update their rate and economic forecasts and that will provide plenty of fodder to…

FOMC Meeting Highlights the Week The FOMC meeting comes at an opportune time with Stimulus 3.0 now passed, and more good news on the virus/vaccine front, yields have pushed to pandemic highs. One thing investors will be looking for is whether the Fed will still express no discomfort from these higher yields? In addition to…

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…