The Financial Times reported Sept. 24 that “U.S. banks made a $1 trillion windfall from the Federal Reserve’s two-and-a-half-year era of high interest rates, an analysis of official data by the Financial Times has found.… Lenders charged more for loans [that they made by buying Treasuries] but kept interest payments to savers down, FT analysis finds.”
On average, U.S. banks were earning 5.5% overnight rates from the Fed, and paying depositors 2.2%. “Those lower payments to depositors generated $1.1tn in excess interest revenue for the banks, or about half of the total dollars banks brought in during that time, according to the FT’s calculations.”
