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Article: To Predict Deposit Rates, Take Look at Jobs Data.
- Article from:
- American Banker
- Article date:
- October 28, 2009
- Author:
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Byline: Katie Kuehner-Hebert
Many executives dwelled this earnings season on how much high unemployment will hurt their credit outlooks, but the other side of the balance sheet presents a fuller, perhaps more optimistic picture.
Deposit rates may not start rising again until the unemployment rate starts to decline, according to a new study - and that probably won't happen until the latter part of 2010.
If that's the case, experts say, the prolonged low-rate environment will benefit banks, provided consumers continue to park their money there.
When the unemployment rate is high and economic activity low, the need for deposits to fund ...