The Fed will prop up the banking sector with lower rates. Our view is that the Fed will lower its Fed Funds Rate by Labor Day.

• The only way to make the banking sector solvent is for the Fed to get its Fed Funds Rate down to where the banks can earn a net interest margin sufficient for them to remain profitable going concerns. I don’t know if that’s a 2% or 3% Fed Funds Rate, but it’s well below the current 5.00-5.25% range.
• Here’s betting that Powell takes the Fed Funds Rate down by Labor Day.
• Should the Fed wish to carry forth the illusion of its hawkishness, it may run QT in the background (thus far QT has been underwhelming).

• Asset Management
• Economy
• Financial Services
• Investing
• Investment Banks