Why big banks are “canaries in the economic coal mine”
This will be a big week for economic news. The consumer price index will come out Thursday and tell us whether inflation continues to moderate under the influence of continuing Federal Reserve rate hikes. And the kickoff of corporate earnings season will also help fill in the near-term picture for interest rates and a potential economic slowdown…But Zandi doesn’t think that’ll last, which might be welcome news for savers. “I do think banks will need to pay their depositors more to hold on to deposits. They are starting to lose deposits.” What happens to banks’ balance sheets in 2023 will tell us a lot about recession risk, said Karen Petrou at Federal Financial Analytics.