To help you understand what is going on in the banking and the financial sector and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...
Loan losses are rising again at banks after reaching historically low levels. Lenders reported $19 billion in charge-offs — losses on loans that lenders deem unrecoverable — in the second quarter, the highest level in more than three years.
More than half of recent losses came from credit card lending, but CRE (commercial real estate) has also experienced a worrying rise in borrower defaults. Borrowers with variable-rate loans are now saddled with higher repayments, and landlords are struggling to rent out space in office buildings due to remote work.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
There are still several sources of strain on the U.S. financial sector. Funding costs and declining income weakened profitability in the second quarter. Banks have lost deposits for the past five quarters, as more folks tap into their savings. Banks are still using the Federal Reserve’s emergency lending programs. Loans from these Fed facilities have stayed above $100 billion since the first week of June, though borrowing has stabilized since a string of bank failures this spring.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Related Content
- Banks Tighten Lending Standards As Demand Wanes
- Banks Tighten Loan Criteria Following Mass Withdrawals: Kiplinger Economic Forecasts
- Are Your Bank Deposits Safe? What to Know
- WFH Impact on Commercial Real Estate Market: Kiplinger Economic Forecasts
- Three Considerations for Stashing Cash After Bank Failures
- How to Protect Your Cash and Investments in a Banking Crisis
- What Is the Federal Funds Rate?
-
Stocks Can't Hold Meta, Microsoft Gains: Stock Market TodayThe main indexes all opened higher Thursday on impressive Big Tech earnings, but momentum faded into the close.
-
Retirement Health Care Costs Are On the Rise: What You Need to KnowA 65-year-old retiree will face significantly higher lifetime health care costs than they would have a year ago, even with Medicare. Here are the surprising totals.
-
Big Changes Are Ahead for Higher EdThe Kiplinger Letter A major reform of higher ed is underway. Colleges are bracing for abrupt change, financial headwinds and uncertainty.
-
July Fed Meeting: Updates and CommentaryThe July Fed meeting came and went, with Fed Chair Powell saying little about a September rate cut and President Trump.
-
What Will the Fed Do at Its Next Meeting?Rate cuts remain on hold this summer, experts say.
-
Breaking China's Stranglehold on Rare Earth ElementsThe Letter China is using its near-monopoly on critical minerals to win trade concessions. Can the U.S. find alternate supplies?
-
What New Tariffs Mean for Car ShoppersThe Kiplinger Letter Car deals are growing scarcer. Meanwhile, tax credits for EVs are on the way out, but tax breaks for car loans are coming.
-
AI’s Rapid Rise Sparks New Cyber ThreatsThe Kiplinger Letter Cybersecurity professionals are racing to ward off AI threats while also using AI tools to shore up defenses.
-
Blue Collar Workers Add AI to Their ToolboxesThe Kiplinger Letter AI can’t fix a leak or install lighting, but more and more tradespeople are adopting artificial intelligence for back-office work and other tasks.
-
Who Will Replace Jerome Powell as Fed Chair?Buzz is building that President Trump could announce Fed Chair Powell's replacement sooner rather than later, even though his term doesn't end until next year.
