With inflation coming below Wall Street estimates in October and nonfarm payrolls rising less than expected last month, there is growing belief in the market that the Fed will start cutting rates next year. This will likely ease banks’ concerns over deposit costs, loan growth, and credit quality.
However, the recent Fed minutes indicate that the central bank will likely keep the policy “restrictive” due to concerns that inflation could be stubborn or move higher. Amid this uncertainty, waiting for better entry points in M&T Bank Corporation (MTB) and Bank of America Corporation (BAC) could be prudent.
