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Are You Ready for Interest Rate Hikes?

We've all heard the rumors. Interest rates will go up in 2013...no, make that 2014...first half of 2015...

But this time, there might be some truth to the long-promised interest rate hikes.

A recent Reuters article quoted Federal Reserve Governor Jerome Powell as saying that, based on a continually improving economy, he is looking to raise interest rates twice this year: initially in September, and once more in December.

Powell is one of five Fed officials making a dual-hike projection, adding more substance to the possibility that rates will actually increase.

An interesting offshoot of this discussion is pertinent to bank leadership and shareholders alike—namely, which institutions are most likely to benefit when interest rates increase? What factors position some banks to benefit in areas such as deposit pricing, while others struggle to compete in the new normalized rate environment?

If you're interested in reading more, check out a recent FICO executive brief on deposit pricing management or my prior blog post on the subject. And please don't hesitate to share your thoughts on these topics.

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