Interest rates

Banks and other financial market participants have been keyed into the central bank's communications around monetary policy expectations. But in an unpredictable economy, the guidance doesn't always hit the mark.

With high deposit and borrowing costs persisting amid the Federal Reserve's campaign against inflation, lenders face stress on their net interest margins and the potential of troubled loans ticking up.

Lenders collected an estimated $25 billion in additional interest income last year by raising the average margin on annual percentage rates, or the amount above the prime rate, according to the Consumer Financial Protection Bureau.

Funding pressures moderated in recent months, but loan charge-offs climbed. With festering concerns about a vulnerable economy, the potential for elevated credits costs could loom large over the upcoming bank earnings season.

The Federal Reserve has allowed more than $1 trillion of assets to roll off its balance sheet. Chair Jerome Powell says he doesn't believe reserves in the banking system are nearing a level that would cause the Fed to slow down or stop.

The North Carolina-based bank is considering the idea of selling a portion of its securities portfolio as a way to build capital, CEO Bill Rogers said Tuesday. At the end of the third quarter, Truist's securities were worth about 20% less than what the company paid for them.

The BSBY interest rate benchmark was originally envisioned as a successor to the once-ubiquitous Libor rate. But it failed to gain much traction, and Bloomberg now plans to shut it down next year.

The JPMorgan Chase CEO's comments contrast with the consensus view after 5.25 percentage points of hikes that lifted the benchmark rate to 5.5% — the highest level in 22 years. Money markets are pricing in cuts from next year.

Analysts look at whether the FOMC will bring the last rate hike in the cycle, whether recession is coming, and whether the Fed is making a policy mistake.