The Wall Street Journal, May 9, 2022, Fed Rate Hikes Are Good for Banks—Unless They End in a Recession
Higher rates are supposed to help bank stocks, but they haven’t this year. The Federal Reserve has raised rates twice since March in a bid to curb inflation and hinted that more increases are on the way.
But investors worry that rate increases that are too big or too fast could tip the economy into recession. Broader markets and big-bank stocks jumped Wednesday after the Fed said it would raise rates by half a point. They fell sharply Thursday and Friday as the realities of a more challenging economic environment set in.
