Asset management giants BlackRock(BLK) and State Street(STT), regional banking powerhouses US Bancorp(USB) and PNC(PNC), and online lender Ally Financial(ALLY) are also on tap to release their latest results.
Investors are hoping financial stocks will benefit from rising interest rates. But it’s a complicated calculus. If the Fed is serious about aggressively tightening monetary policy, that could backfire on the big banks.
The Fed is no longer expected to raise rates gradually. The consensus opinion among economists is that a series of quarter-point hikes will no longer cut it.
The Fed is behind the curve on inflation. It’s time for shock and awe.
After slashing rates to zero at the start of the pandemic in March 2020, the Fed held rates there until finally lifting them to a range of 0.25% to 0.5% in March.
But, according to futures trading on the Chicago Mercantile Exchange, investors are now pricing in a nearly 80% chance of a half-point hike at the Fed’s May meeting and about…