2026-01-09 04:21:49

The recent performance of the bond market is quite interesting. The US Treasury yield curve is continuously steepening, which is a significant boon for banks.

Why? Simply put, it widens the net interest margin. Banks finance with short-term low-cost funds and lend out long-term high-yield assets, directly opening up this interest rate spread. Additionally, the M&A market is also heating up, and the revenue from investment banking divisions may exceed expectations.

Sounds good, but the problem is—risks are also accumulating. If the employment market continues to weaken, borrowers' repayment ability could become problematic. At that point, credit quality may decline, and default rates could rise, potentially eroding the growth in these earnings. So, it's important to keep an eye on changes in employment data and credit indicators.

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QuietlyStaking

· 01-11 15:29

Banks are indeed benefiting from the current wave of dividends, but I still feel it's a bit虚… Once the bad debt rate rises, it's game over. It seems that employment data is the real ticking time bomb. The steepening curve sounds good, but who will clean up the mess if borrowers can't repay? While net interest margin widening is a positive, the risks need to be carefully assessed. M&A activity is high? Come on, let's wait and see which banks will face setbacks.

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fomo_fighter

· 01-11 03:20

Banks are definitely enjoying this round, but I think the risks are underestimated. Once employment breaks down, bad debts will avalanche.

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metaverse_hermit

· 01-09 04:51

The steepening of the yield curve is indeed an opportunity for banks, but the question is how long this market trend can be sustained. Wait, if the employment data collapses and borrowers can't repay their loans, the banks' interest margin profits could be wiped out by bad debts in minutes. That's why we must keep a close eye on employment data—everything depends on that.

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mev_me_maybe

· 01-09 04:47

A widening net interest margin sounds great, but you really need to be careful with credit risk. Just one poor employment data point and everything could turn sour.

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LiquidityWitch

· 01-09 04:46

Widening net interest margin sounds great, but the bad debt rate is a ticking time bomb that must be closely monitored; otherwise, no matter how much profit there is, it will be useless.

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CommunityLurker

· 01-09 04:46

A widening net interest margin sounds great, but I'm worried that if employment data crashes, leading to a surge in bad debt rates, the banks' current profits will be wasted.

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digital_archaeologist

· 01-09 04:24

Widening net interest margin sounds great, but I'm worried that a turn could bring a wave of bad debts. Whether banks can hold onto the money they've made this round is really uncertain.

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