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Banks' NIM Under Pressure Despite Rate Cuts
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US banks' net interest margins (NIM) are predicted to remain under pressure despite the Federal Reserve's potential rate cuts, with 16 of the 20 largest banks facing a median decline of 14 basis points in 2024. This is due to higher funding costs and intensified competition from high-yield alternatives, impacting banks' profitability.
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How might the potential decline in net interest margins affect the overall stability of the banking sector?
In what ways could the trend of declining net interest margins influence consumer lending and borrowing decisions?
What strategies could US banks employ to mitigate the impact of higher funding costs and intensified competition?
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