It's less likely the Federal Reserve will raise interest rates again next month, according to a growing number of economists. If they're right, it compounds the problems big banks on Wall Street are facing.
Most banks ended last year pricing in expectations the Fed would hike interest rates three or four times.
Banks including JPMorgan, Bank of America and Citigroup stand to make billions as the Fed increases interest rates. Collectively, the banks said rates being raised to 1 percent, or 100 basis points, over a 12-month timeframe equates to more than $9 billion in interest income, the revenue derived from lending.
Now, the idea that the Fed will raise rates to 0.5 percent in March has been discounted. Most banks' top economists say they're expecting two or three rate hikes in 2016, which means the banks could yet reap billions in interest income that has been sorely missed since the financial crisis. Still, it's not clear banks will get even half the interest rate increases they expected this year.
Goldman Sachs took the probability of a March interest rate hike off the table in a note from economists Jan Hatzius and Zach Pandl on Wednesday.