The Biden economy is falling apart at the seams. Ten banks are downgraded by Moodys and more are on a watch list.
The Biden economy is a mess.
Reuters reported today:
Moody’s cut credit ratings of several small to mid-sized U.S. banks on Monday and said it may downgrade some of the nation’s biggest lenders, warning that the sector’s credit strength will likely be tested by funding risks and weaker profitability.
Moody’s cut the ratings of 10 banks by one notch and placed six banking giants, including Bank of New York Mellon (BK.N), US Bancorp (USB.N), State Street (STT.N) and Truist Financial (TFC.N) on review for potential downgrades.
MSN reported on the Moody’s downgrade listing the 10 midsized banks downgraded.
The agency downgraded the credit ratings of 10 midsized banks by one notch. They were M&T Bank (MTB), Webster Bank (WBS), Pinnacle Financial Partners (PNFP), BOK Financial Corp. (BOKF), Associated Banc-Corp. (ASB), Old National Bancorp (ONB), Amarillo National Bank, Commerce Bancshares (CBSH), Prosperity Bank (PB), and Fulton Financial Corp. (FULT).
The decision reflects a challenging backdrop for the banking industry, amid intense competition for attracting deposits in the aftermath of this year’s banking crisis. Moody’s cited increased funding costs, profitability pressures, and slowing loan growth as a common theme in banks’ second-quarter earnings.
“U.S. banks’ Q2 earnings showed material increases in funding costs as well as profitability pressures related to the significant and rapid tightening in monetary policy and inverted yield curve, which will continue to lower profitability and implies a weaker ability to generate capital internally,” Moody’s analysts said.
This comes after a few days ago when Fitch downgraded the US in a huge negative signal to the Biden economy.
Many are now expecting a recession next year. Rising inflation and gas prices don’t help.