Here's How Significantly Higher Interest Rates Have Helped (and Hurt) Bank of America Over the Years
The Federal Reserve's interest rate hiking spree over the past couple of years has been a double-edged sword for banks. Higher rates make lending a more profitable business. But they also work against economic growth, crimping banks' other profit centers. The key for these institutions is to maximize the upsides from lofty interest rates while limiting their downsides.
So how has Bank of America (NYSE: BAC) fared in the middle of this tug-of-war? Not quite as well as many investors were hoping it would. If you own its stock, you've certainly got something to keep an eye on. If you don't own it, there may be better options out there to buy right now.
Federal Reserve Chairman Jerome Powell and his colleagues must walk a fine line, to be sure. Unchecked inflation can up-end an economy. Excessive interest rates enacted to stem that inflation can do the same. The Fed must find and maintain a healthy, sustainable balance between the two.
Source Fool.com
