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Bank of America downgraded as inverted yield curve, Fed rate cuts to hurt income, analyst says

August 29, 2019


Bank of America could see its profits take a hit over the next year as long-term interest rates continue to fall and “the potential for several additional rate cuts” from the Federal Reserve threaten the bank’s income growth, Raymond James said in a note published Thursday.

The brokerage downgraded Bank of America shares to market perform from outperform ahead of the expected headwinds, warning clients that the megabank is especially sensitive to changes in the shape of the yield curve given its large lending business and deposit base.

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