Correspondent Blog

The market is now pricing Fed Fund hikes beginning in 2022, and the proposed fiscal stimulus in the form of two separate infrastructure bills totaling $4.5T has created a new sense of optimism for FOMC members. However, the lingering concern that many bankers hold is can the country (US Department of the Treasury) afford to…

Recent regulatory messages have reinforced the importance for commercial banks to prepare for the end of LIBOR after 2021.  However, banks cannot wait until the end of 2021 to find replacement index(es)  because the transition from LIBOR requires changes to systems, vendors, training, and marketing that can take several quarters to finalize and implement.  To…

Every year we analyze the industry’s cost of funding earning assets (COF) and track how community bank’s COF behaves relative to larger banks and how COF moves with various indices. The information is critical for all banks as it is helpful to understand how sensitive your balance sheet is to rising or falling rates. We…

There appears to be some complacency regarding the Federal Reserve’s monetary policies in 2021 and 2022. The ten-year Treasury, around 1.35%, may be sending a short-term signal on liquidity versus a long-term prediction on inflation.  Community bankers need to factor in the high probability (50% to 75%) that tapering will start in 2021 and not…