Here is an eye-opener. Investors have for years been buying bank stocks in the expectation of rising rates. That idea was a major component of the Trump rally. However, the view from the inside appears to be changing, as banks don’t think rates are going up. According to the Wall Street Journal, banks have given up on rising rates and are buying up all manner of loans that have low rates locked in for long periods, a sure sign they do not expect rates to move higher. Overall, the percentage of bank assets whose rates will not rise in the next five years hit a new high in the second quarter.
FINSUM: After all the hopes of increased profitability from higher rates, everything seems to have returned to the “lower for longer” post-Crisis paradigm.