To help you understand what is going on in the banking and the financial sector and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...
Loan losses are rising again at banks after reaching historically low levels. Lenders reported $19 billion in charge-offs — losses on loans that lenders deem unrecoverable — in the second quarter, the highest level in more than three years.
More than half of recent losses came from credit card lending, but CRE (commercial real estate) has also experienced a worrying rise in borrower defaults. Borrowers with variable-rate loans are now saddled with higher repayments, and landlords are struggling to rent out space in office buildings due to remote work.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
There are still several sources of strain on the U.S. financial sector. Funding costs and declining income weakened profitability in the second quarter. Banks have lost deposits for the past five quarters, as more folks tap into their savings. Banks are still using the Federal Reserve’s emergency lending programs. Loans from these Fed facilities have stayed above $100 billion since the first week of June, though borrowing has stabilized since a string of bank failures this spring.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Related Content
- Banks Tighten Lending Standards As Demand Wanes
- Banks Tighten Loan Criteria Following Mass Withdrawals: Kiplinger Economic Forecasts
- Are Your Bank Deposits Safe? What to Know
- WFH Impact on Commercial Real Estate Market: Kiplinger Economic Forecasts
- Three Considerations for Stashing Cash After Bank Failures
- How to Protect Your Cash and Investments in a Banking Crisis
- What Is the Federal Funds Rate?
-
Colorado Sending Billions in TABOR RefundsState Tax Are you receiving a TABOR refund with your 2025 Colorado state income tax filing? Don’t miss the deadline.
-
How a Financial Adviser Can Help You Sleep at NightWhen it comes to your money and planning for your retirement, legacy and more, you might need a professional to help you stay on top of it all.
-
Start-ups Trying to (Profitably) Solve the World’s Hardest ProblemsThe Letter More investors are interested in companies working on breakthrough science to tackle huge societal challenges. The field of deep tech has major tailwinds, too.
-
Will lower mortgage rates bring relief to the housing market?The Kiplinger Letter As mortgage rates slowly come down here's what to expect in the housing market over the next year or so.
-
CPI Report Points to Gradual Pace for Rate Cuts: What the Experts Are SayingCPI Inflation surprised to the upside last month but the disinflation trend remains on track.
-
The Big Questions for AR’s FutureThe Letter As Meta shows off a flashy AR prototype, Microsoft quietly stops supporting its own AR headset. The two companies highlight the promise and peril of AR.
-
Strong September Jobs Report Puts Soft Landing in Sight: What the Experts Are SayingJobs Report A blowout reading on nonfarm payrolls takes another jumbo-sized cut to interest rates off the table.
-
China's Economy Faces Darkening OutlookThe Letter What the slowdown in China means for U.S. businesses.
-
Fed Goes Big With First Rate Cut: What the Experts Are SayingFederal Reserve A slowing labor market prompted the Fed to start with a jumbo-sized reduction to borrowing costs.
-
Should We Worry About the Slowing U.S. EconomyThe Letter With the labor market cooling off and financial markets turning jittery, just how healthy is the economy right now?
