Deregulation arrives too late to save banks from rate-hike losses
FDIC compliance relief cuts costs by millions while Fed hikes threaten billions in HTM losses and deposit flight.
probability of at least one Fed rate hike by year-end
Regional bank NIM compressed 15bps in the first two quarters after March 2022 hikes began as deposit betas spiked to 65% while loan repricing lagged.
One pattern. Trace it.
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A pattern worth naming
Track OCC and Fed for companion proposals. (2) Next two inflation prints (CPI mid-July, PCE late July) determine whether the 80% rate hike probability holds or fades.
- Shift
Deposit betas now spike faster than asset yields reprice, reversing the historical NIM expansion playbook
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FDIC deregulation arrives during late-cycle tightening for the second time in eight years
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Oil markets price through Hormuz risk entirely, ending the Middle East fear premium
“If the FDIC raises the resolution planning threshold to $250B, do we stay under it or cross it to compete for deals?”
Ask your treasurer whether HTM portfolio losses exceed compliance cost savings if rates rise 75 basis points by December.
By Joseph Lancaster, Editor — with research from Pine Needle's intelligence layer.
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