"Street Talk" is a podcast hosted by S&P Global Market Intelligence that takes a deep dive into issues facing financial institutions and the investment community.
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U.S. banks’ fourth-quarter 2023 earnings demonstrated continued pressure on funding costs and minimal slippage in credit quality. The Street largely took the results in stride, but management teams were hopeful that net interest margin pressure could subside in the second half of 2024 and credit quality would hold up in the face of a higher-for-longer rate environment, according to Gerard Cassidy, co-head of global financials research at RBC Capital Markets.
In the episode, the veteran analyst said he shares that optimistic outlook and believes the current environment is more similar to 1995 when the US economy digested sharp rate hikes by the Federal Reserve and likely will not result in a severe downturn like some investors fear. Cassidy believes bank stocks are a show-me story, but sees further catalysts on the horizon. The analyst also offered his outlook for bank M&A activity.
