- The Fed's jacked short-term interest rates by 100 basis points since the end 2015. Banks pushed through increases in lending rates - often within minutes of each Fed move - but deposit rates, for the most part, have failed to budge.
- "Nobody wants to be first," says the CEO of Fifth Third Bancorp (NASDAQ:FITB) (if an airline CEO said that, the antitrust regulators wouldn't take long to pounce).
- The champion, though, is Bank of America (NYSE:BAC), whose cost for U.S. interest-bearing deposits in Q1 was just 0.09% - the lowest among peers (the current Fed Funds rate is 1%-1.25%). Bank CFO Paul Donofrio doesn't expect customers to chase rates elsewhere as many have primary checking accounts with BAC.
- Some say that depositors - in the age of ZIRP - grew so used to getting no interest, that it's not something on their radar. It could take another couple of Fed rate hikes for light bulbs to turn on across America.
- ETFs: XLF, FAS, FAZ, KRE, VFH, UYG, KBE, IYF, FNCL, BTO, IAT, IYG, KBWB, QABA, FXO, SEF, KBWR, RYF, FINU, XLFS, DPST, KRU, FINZ, RWW, WDRW, KRS, FAZZ, JHMF, FTXO, FNCF
- Now read: Bank Of America Is Overvalued - Really?
Original article