Watching regional banks amidst yield curve shifts
Seeing the yield curve steepen a bit today has me revisiting the regional bank names, especially after the recent CPI print cooled some Fed hawkishness. While the broader market seems to be digesting earnings season well, the financial sector, particularly smaller banks, could face renewed pressure if the longer end continues to move up while the short end remains anchored. The $USDTHB moving today doesn't directly affect my US equity watchlist, but it's another data point showing some broader dollar strength, which can be a double-edged sword for globally exposed US companies. Thinking about how loan growth will look if borrowing costs at the longer end keep climbing. Not seeing any immediate triggers to short, but certainly adding some key regional bank ETFs to a closer watch for any significant cracks in their balance sheets or earnings guidance. The risk/reward just feels less compelling there for now compared to other sectors. What are others seeing in financials?
Good point on regional banks. The flattening for so long has certainly impacted their lending margins, so a steepening curve could offer some relief, but the credit quality in a higher rate environment is still a concern for me.