Bank of America’s Consumer Banking Rides on Interest Income
The Fed’s hawkish monetary policy has benefited US commercial banks (XLF) since December 2015. This policy has allowed these banks to garner improving net interest margins (or NIMs). The rate hike cycle is in line with the Federal Reserve targeting three rate hikes in 2018. As yield curves have flattened out, the cycle might end sooner than expected, possibly in 2019.