Interest rates

Rate locks have increased every month this year, but May's pace came in more subdued than early-year numbers, according to Mortgage Capital Trading.

Bank stocks are up this year as interest rates have leveled off and there are hopes that pressure on lenders' profits could moderate.

The Federal Open Market Committee held the federal funds rate at current levels, citing "lack of further progress" toward meeting inflation goals.

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.