Crunch time is coming to Wall Street.
Last week, big banks got bad news when the Federal Reserve opted against hiking interest rates, and shifted its language to suggest it may hike interest rates only once in 2016.
It's something that has the potential to affect banks on Wall Street. Big banks are required to maintain cash balances totaling hundreds of billions of dollars with the Federal Reserve. The banks earn interest on those big capital reserves, but the Federal Open Market Committee has dragged its heels on higher rates, which means the banks make less on what they keep at the Fed.
The rise from zero percent interest rates is moving more tepidly than Wall Street had hoped for, and it's going to come home to roost on its top line. In past quarters, big banks have fought their way to profitability by cutting headcount, and they may have to do that again in order to meet goals.
"It's the last and only lever to pull," said Joo-Yung Lee, Fitch Ratings' head of North American financial institutions, "because rates have been so low for so long."