According to an article from the Wall Street Journal yesterday, investors can expect that earnings from the U.S. banks, like Bank of America, this quarter are not going to be spectacular.
But why the letdown?
In this segment from Friday's edition of Where the Money Is, Motley Fool financial analysts Matt Koppenheffer and David Hanson discuss the biggest lever for banks that can make a difference in earnings. While the non-interest component of banks' revenues tends to be fairly stable from quarter to quarter, it won't be until interest rates start to rise again that banks will truly be able to significantly increase revenue.
While the tapering down of the Fed's quantitative easing program was expected to increase interest rates from their historic lows, so far that has yet to happen, leaving banking investors with potentially another lackluster quarter.
Don't let low interest rates hold you down
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