HomeFinancial MarketsRegional Bank Stocks Rise as Investors Await Fed Decision

Regional Bank Stocks Rise as Investors Await Fed Decision

Regional banking stocks largely rose on Wednesday as investors await the Federal Reserve’s latest monetary policy decision. Officials are set to decide on their latest interest rate move at the Fed’s two-day policy meeting starting on Wednesday.

PacWest led the banking stock rally, gaining 4% while Western Alliance followed closely with a 2% rise. Zions, Comerica, and Key, all of which dropped on Tuesday, turned their fortunes around on Wednesday, and made moderate gains.

The latest round of banking volatility follows the announcement of JPMorgans’ purchase of the bulk of the assets of the struggling First Republic Bank; the most recent major U.S. bank to collapse.

A major concern for banks this year has been the mass shortage of deposits they have been faced with. Since mid-April 2022, banks have lost $960 billion in deposits – approximately 5.3%. Fed data suggests that this is the largest loss since the Fed began collecting this data in 1973.

Analysts expect the Federal Reserve to impose a 25 basis point hike before pausing its rate increasing agenda in the next policy meeting.

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