In the wake of the Silicon Valley Bank collapse, the Federal Reserve introduced the Bank Term Funding Program (BTFP) to stabilize the financial sector, but this program has recently expired. Simultaneously, the anticipation of a Federal Reserve rate cut has been delayed indefinitely due to ongoing high inflation. This delay means that banks continue to face tough competition from higher-yielding money market funds for depositors. This dual pressure of the expired assistance program and the deferral of rate cuts poses significant challenges for banks, suggesting that now might be an opportune time to bet against them.
Posted: 2024-05-08 15:42:11.000000