With expectations of the Fed tightening monetary policy sooner rather than later, long-term interest rates of recent have increased significantly. Investors are now planning to re-position their portfolios, by choosing the assets, which are expected to do well with rising interest rates. You may well then think that banks are going to benefit from higher interest rates; after all, bankers have been blaming the low interest rate environment and quantitative easing to explain why their net interest margins have shrunk so much in recent years.
Banks would be able to earn higher interest rates on the loans they offer, reinvest into higher yielding investments, and increase profits from bond trading. However, it is not so clear that banks are really...
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