TLDR:
- US regional-bank shares fell further on Monday, following Federal Reserve Chair Jerome Powell’s comments that the central bank is planning on waiting to cut interest rates until later this year.
- The biggest loser among the ETF’s holdings was New York Community Bancorp, which reported a surprise quarterly loss, cut its dividend, and increased its loan-loss provisions.
- The decline in regional-bank shares was also attributed to Powell’s remarks during an interview with “60 Minutes” that aired on Sunday.
Shares of US regional banks continued to slide on Monday as traders reacted to Federal Reserve Chair Jerome Powell’s comments that the central bank is planning on waiting to cut interest rates until later this year. The SPDR Regional Banking ETF (KRE) was down 1.6%, building on a 7.2% drop from the previous week. The ETF saw its biggest weekly drop since June 23 of last year. New York Community Bancorp was the biggest loser among the ETF’s holdings, reporting a surprise quarterly loss, cutting its dividend, and increasing its loan-loss provisions. This news reignited investor concern about the sector’s exposure to struggling commercial-real-estate loans. The decline in regional-bank shares was also attributed to Powell’s remarks during an interview with “60 Minutes” that aired on Sunday, where he indicated that the Fed would likely delay rate cuts. Analysts believe that lower rates would benefit the sector by easing pressure on borrowers who may struggle to pay their loans at current levels.
