Correspondent Blog

The first quarter of 2026 has brought tariffs, a war, greater inflation/higher energy prices, AI-driven changes, more volatility and more uncertainty. Unfortunately, almost every aspect of this current environment is inversely correlated to bank performance. The bank credit outlook is highly volatile with a skew to the downside due to higher inflation to include higher…

As the risk of a recession gets pushed out by the market, so does the risk of credit. This is not to say bank credit is without risk, as higher rates, inflation, and a slowing economy have taken their toll. Three essential credit metrics – probabilities of default (POD), POD rate of change, and POD…