Shares of banks and other financial institutions fell as investors weighed remarks by a pair of Fed officials.
Richmond Fed President Tom Barkin said that inflation is still too high and he needs to be convinced it’s slowing more quickly before he would back an end to rate increases. Fed Gov. Christopher Waller said that the fallout from several bank failures in the spring is likely to continue to play a role in the central bank’s decision on how much to raise rates.
Leveraged loan defaults are heading for the third-worst year in history as Federal Reserve interest rate hikes take a toll, according to Goldman Sachs. The volume of defaults by riskier companies in the bulging leveraged loan market has risen in June, bringing the total amount of soured debt in the sector to $24.5 billion, according to a tally by Goldman Sachs analysts.
Key Democratic and Republican senators have agreed to a bipartisan bill that would help regulators claw back the compensation of executives deemed responsible for a bank failure. The deal between Senate Banking Committee Chair Sherrod Brown (D., Ohio) and South Carolina Sen. Tim Scott, the top Republican on the panel, comes after the failures of three midsize banks this year sent tremors through the industry. The collapses prompted calls from the White House and lawmakers in both parties for tougher punishments for executives at failed institutions.
Write to Amy Pessetto at amy.pessetto@dowjones.com
(END) Dow Jones Newswires
06-16-23 1751ET
