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Fed's rate cut will be good for banks, KBW upgrades Citigroup, Bank of America and Goldman Sachs

A Goldman Sachs sign is seen on at the company's post on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters

Given current economic strength, soon to be bolstered by the Federal Reserve's easier policy, banks will soon outperform as people become more willing to spend money, according to Keefe, Bruyette & Woods.

The firm upgraded the universal bank sector to overweight from market weight and upgraded shares of Citigroup, Bank of America and Goldman Sachs to outperform from market perform.