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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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?
-
S&P 500 Hits New Highs as Rally Resumes: Stock Market TodayTech stocks were the biggest gainers on Wall Street today, with Nvidia and Dell making notable moves.
-
The Shutdown Standoff Is Heading for Its Next Big TestA key mid-October deadline could intensify the shutdown fight in Washington, and the fallout could soon hit workers and your wallet.
-
Government Shutdown to Delay Data, Including Key Jobs ReportWhile government shutdowns typically don't impact stock returns, they can delay the release of key economic data – including the monthly jobs report.
-
Japan Enters a New Era of Risk and ReformThe Kiplinger Letter Japan has entered a pivotal moment in its economic history, undertaking ambitious policy and structural reforms to escape from decades of stagnation.
-
After Years of Stagnant Growth, Hope Emerges for EU EconomyThe Kiplinger Letter Can a German fiscal push outweigh French political peril?
-
September Fed Meeting: Updates and CommentaryThe September Fed meeting is a key economic event, with Wall Street keyed into what Fed Chair Powell & Co. will do about interest rates.
-
Hot August CPI Report Doesn't Shift the Rate-Cut Needle: What the Experts SayThe August CPI came in higher than forecast on a monthly basis, but Wall Street still expects a rate cut at next week's Fed meeting.
-
Trump's Economic InterventionThe Kiplinger Letter What to Make of Washington's Increasingly Hands-On Approach to Big Business
-
Dismal August Jobs Report Offers Rate-Cut Relief: What the Experts Are SayingThe August jobs report came in much lower than expected, lifting the odds that several rate cuts will come through by year's end.
-
AI Start-ups Are Rolling in CashThe Kiplinger Letter Investors are plowing record sums of money into artificial intelligence start-ups. Even as sales grow swiftly, losses are piling up for AI firms.
