Investors shouldn’t lose sight of the bigger picture. The profit upshot of higher rates can in effect be muted by less borrowing. Over time, the hope is that higher rates would outweigh the effect of higher costs—if those rises are modest. None of this is to say that higher rates aren’t still fundamentally good for banks, especially if the curve is steep. So perhaps investors thinking about 2022 shouldn’t expect banks to react positively to every indicator of higher rates.

Source: Mint January 15, 2022 21:27 UTC