Published on 6 Jun 2016
As
Federal Reserve Chair Janet Yellen prepares to speak Monday afternoon,
Real Money's Fill or Kill Team will be paying close attention to bank
stocks, most notably Bank of America and Wells Fargo . Bank stocks have
faltered somewhat in recent years as the Federal Reserve has kept
interest rates near zero. Low interest rates mean banks can only charge
lower rates on their loans. Lower interest rates compress bank's net
interest margin, which is the spread between the interest banks earn on
their loans and the interest they pay on deposits. Last week's weak jobs
data in which only 38,000 jobs were added by U.S. employers in May make
a rate-hike seem less likely. For so-called money center banks such as
Bank of America, any indication that the Fed will continue to keep rates
near zero after its meeting next week, could be interpreted as another
blow to the banks.
