Fed Chairman Jerome Powell faces the tough challenge of presenting a unified voice on Fed policy from the most divided Fed in years.Market Insiderread more
Beijing is still short on details on how it will respond to new U.S. tariffs on Chinese goods.World Economyread more
Falling air cargo demand could be flashing warning signs about the broader economy.Transportationread more
U.S. Secretary of State Mike Pompeo says Huawei CFO Meng Wanzhou, who is under house arrest in Canada and facing extradition to America, is not a bargaining chip in the trade...Technologyread more
Target's latest earning report shows how these investments are driving traffic and sales at a time when other retailers are struggling.Retailread more
European Union officials drafted a plan to launch a sovereign wealth fund to invest in companies that could compete with U.S. and Chinese tech giants, according to reports in...Technologyread more
The chip, called the Ascend 910, was first unveiled in October last year and is aimed at data centers.Technologyread more
Brazilian President Jair Bolsonaro hit back at French leader Emmanuel Macron, after he urged dialogue among G-7 leaders on the rising number of fires in the Amazon rainforest.World Politicsread more
Investors are rushing to get a piece of its privately held rival Impossible Foods before it goes public, according to the Wall Street Journal.Food & Beverageread more
"The economy may be in good shape now, but if we keep getting more and more tariffs it could deteriorate," Jim Cramer says.Mad Money with Jim Cramerread more
Local governments commonly share single service providers, making many vulnerable at once. On top of this, ransomware has often been used to mask more targeted, malicious...Technologyread more
Bank of America is the latest lender to warn how falling interest rates will cause a main engine of bank profits to sputter to a halt this year.
The firm said in April that growth in net interest income would slow from 6% last year to 3% for 2019. However, that measure may slow further to about 1% this year if the Federal Reserve cuts interest rates twice, Chief Financial Officer Paul Donofrio told analysts Wednesday during a conference call.
"From here, if we were to assume stable rates, we think our NII for 2019 would now be up approximately 2% compared to 2018," Donofrio said. "If rates follow the forward curve, and the Fed funds rate were indeed to be cut twice this year starting this month, we think it would likely shave another 1 percent off NII growth for 2019."
Global economic conditions have worsened in recent months amid the U.S.-China trade dispute, and the Fed has signaled it is likely to cut its benchmark interest rate later this month. That has roiled the shares of banks including Wells Fargo and J.P. Morgan Chase this week, which have both indicated that falling rates will impact net interest income. NII is the spread banks earn by making loans at a higher interest rate than what they pay depositors.
Both long and short term rates have declined in recent months, and that hurts the bank in three ways, Donofrio said: So-called "floating rate" assets held by the bank will yield less; new bonds purchased will offer lower coupons, hitting returns on the bank's portfolio, and mortgage customers may refinance at a lower rate.
Shares in Bank of America were up 2% Wednesday afternoon after earlier falling more than 1% in premarket trading. The bank posted a record profit that exceeded analysts' estimates on the strength of its retail banking and wealth management divisions.
Helping matters, CEO Brian Moynihan indicated on the call that the bank could dial back expenses if the revenue environment warranted it.