NEW YORK, NY -- (Marketwire) -- 01/30/12 -- Money Center Banks such as Bank of America and Keycorp -- already struggling to boost revenues due to the low interest rate environment -- are likely to expect further pressure on their margins after The Federal Open Market Committee said that economic conditions are likely to warrant "exceptionally low levels for the federal funds rate at least through late 2014." According to a recent article from Reuters, commercial and industrial lending has been the sole bright spot in an otherwise lackluster loan environment, pointing to an improving economy. The Paragon Report examines investing opportunities in the Money Center Banking Industry and provides equity research on Bank of America Corporation (NYSE: BAC) and KeyCorp (NYSE: KEY). Access to the full company reports can be found at:
www.paragonreport.com/BAC
www.paragonreport.com/KEY
The Fed gave a bleak outlook for the economy, prompting speculation that it was preparing the way for QE3, Bloomberg reports. Federal Reserve Chairman Ben Bernanke said the Federal Reserve would not hesitate to take further action if the country continues to "have this unsatisfactory situation."
According to a recent article from Bloomberg, the decision could hurt bank profits as they struggle to find loans or securities with yields high enough to support their net interest margins, a gauge of profitability that measures the difference between the cost of funds and what they earn on assets.
The Paragon Report provides investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them. For more investment research on the Money Center Banking industry register with us free at www.paragonreport.com and get exclusive access to our numerous stock reports and industry newsletters.
Richard Staite, a London-based analyst with Atlantic Equities LLC argues that banks may be able to avoid some of the negative impact of low rates if the Fed's policy fuels economic growth and lending picks up. "The best thing the Fed can do is promote economic growth, even if that requires a sustained period of low interest rates," Staite told Bloomberg. "Loan growth will be the most important factor to helping banks offset the negative impact of low rates."
The Paragon Report has not been compensated by any of the above-mentioned publicly traded companies. Paragon Report is compensated by other third party organizations for advertising services. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at http://www.paragonreport.com/disclaimer
Add to Digg Bookmark with del.icio.us Add to Newsvine
