#BankOfAmerica
📉 The Chief Financial Officer of Bank of America warns
The Chief Financial Officer of Bank of America stated that a significant interest rate cut will impact the bank's net interest income.
💡 What does that mean?
Banks earn from the difference in interest between what they lend and what they pay on deposits.
When interest rates drop, the yield from loans and investments decreases, while some liabilities may remain the same.
The result: a decrease in net interest income and possibly pressure on the bank's profits.
📌 In summary: A sharp interest rate cut may be beneficial for the overall economy, but it directly pressures banks' profits.
