Mike Mayo, Wells Fargo senior analyst, joins the ‘Halftime Report’ to discuss his call for banks after earnings. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
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BREAKING: Recession News
LEARN MORE ABOUT: Bank Failures
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According to Mike Mayo, a banking analyst at Wells Fargo, the current economic recession may actually benefit banks due to higher rates. Mayo has predicted that this will be the best recession for banks in decades due to the potential for higher interest rates.
One of the main reasons for this prediction is the Federal Reserve’s decision to cut interest rates to zero in response to the pandemic. Mayo believes that as the economy recovers and the Federal Reserve raises rates, banks will benefit from the higher interest rates on loans and deposits.
In addition, Mayo notes that banks have been able to build up their capital reserves during the past decade since the financial crisis. This means that they are better able to withstand economic shocks, such as the current recession.
Mayo also points out that many banks have already implemented cost-cutting measures to improve their profitability, including layoffs and branch closures. These moves should help to offset any potential losses from loan defaults during the recession.
Mayo’s prediction has raised eyebrows among some economists, who argue that the recession will have a damaging impact on banks. They point out that a sharp rise in loan defaults could wipe out any potential gains from higher interest rates, and that low interest rates could actually hurt banks’ profitability by reducing the spread between loan and deposit rates.
Despite the concerns, Mayo is confident in his prediction. He notes that banks have been through many economic cycles in the past, and have always managed to emerge stronger. Mayo’s analysis is based on a long-term view of the banking industry, and he believes that banks are well-positioned to weather this recession and emerge even stronger.
Overall, Mayo’s analysis suggests that banks may be better positioned than many people think to weather the current recession. While there are risks and challenges ahead, the industry has already taken steps to address them, and they may even benefit from the shifts in the economy. Only time will tell if Mayo’s predictions come true, but for now, his analysis is providing a ray of optimism in uncertain times.
Can't trust CNBC by its own nature
ewww terrible thing for these people to say on camera cause we know that in this downturn corporate debt is going to bust for the 1st time after it was postponed in 2008 and again 2020
US government is a thief, they just buy something using a leaf
Oh good, now im going to sleep well knowing the banks are making money. Even if they are not…well uncle sam will make you whole. Clown world…just buy bitcoin
The fin-Market;s have underperformed the U.S. economy as fear of inflation hammers the prices of stock;s and bonds. My portfoliio of $250k is down to $192k any recommendation;s to scale up my return;s during this crash will be highly appreciated.
Unbearable to watch. Stop trying to be original. Get to the freaking point and get out.
Banks needs to be removed from humankind
gotta love the optimism
A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
The crypto market has been unfavorable for months and i keep losing my money selling-off during dips,i"m very scared of holding right now,how do you guys still make so much
Mayo's take on banks will not age well. Inverted yields curves don't age well either.
Let Banks have your homes ($ Millions) – You are FREE.
All he does is interrupt. It's tiring.
Puts on banks
What a dumb prop
Did that guy just say pitcher pitches with a “basketball”? Never trust a guy whose that illiterate in sports
Banks haven't been doing well the last 20 years lol
Can you Explain how beginners can make huge profit within a short period of time? I feel it's the best time to get started on the market, heard some guy speaking of making over $3.5M within 4months of investing $450k. any suggestions pls