Major US Banks Raise Prime Rate to 7.0% After Fed Hike

MacroDigital Finance
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Summary · why it matters

Following the Federal Reserve's decision to raise its policy rate, major US banks announced on the 16th that they are raising their prime rate. The Fed decided on its first rate hike since 2023 that day. Accordingly, JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, KeyCorp, Huntington Bancshares, Fifth Third Bancorp, and Truist Financial will change their prime rate from the current 6.75% to 7.0%, effective the 17th. The prime rate is tied to the federal funds rate that the Fed targets and serves as the benchmark for setting interest rates on many financial products, including credit cards and personal loans. In general, rate hikes boost bank earnings through an increase in net interest income, the difference between lending and deposit rates, while monetary tightening can slow parts of the economy and lead to weaker loan demand and deteriorating borrower credit quality. Even so, at an industry conference held in New York this week, executives from major banks voiced a succession of positive views on the US economy.

Impact on stocks 7

Financials▲ · 2 stocks
Bank of America Corp
BAC
▲ PositiveMonetaryrelevance

Bank of America raised its prime rate to 7.0% after the Fed hike, which generally boosts net interest income.

Wells Fargo & Company
WFC
▲ PositiveMonetaryrelevance

Wells Fargo raised its prime rate to 7.0% following the Fed's rate hike, supporting net interest income.

Digital Finance & Tokenization▲ · 2 stocks
Citigroup Inc.
C
▲ PositiveMonetaryrelevance

Citigroup raised its prime rate to 7.0% following the Fed's rate hike, lifting net interest income.

JPMorgan Chase & Co
JPM
▲ PositiveMonetaryrelevance

JPMorgan Chase raised its prime rate to 7.0% after the Fed hike, generally boosting bank earnings via net interest income.

Others▲ · 3 stocks
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