Bloomberg Surveillance · Monday, July 6, 2026
A key strategy of the current administration and the Federal Reserve is to encourage more lending through traditional banking channels. This policy aims to foster a privately driven, organic economic expansion. While the yield curve may be flattening, an acceleration in long-term growth is expected to benefit banks, particularly those in the money center and capital markets, though regional banks might see a temporary pause.
“So while the your curve is flattening, long growth is accelerating, and that's this whole broadening out story of the economy.”
“This is a strategy of the administration. They want a privately driven organic economic expansion, and that's what we're getting, notwithstanding that maybe the labor market isn't as robust as some people were hoping.”
“So I think that group could pause a bit. We took that off of our list of favorites for the for the broadening trade this week, but ultimately between now and year in, we think we do think the banks are going to do quite well because this is a strategy of the Treasury and the Fed is they want more lending going through the traditional lending sector.”