Banks Are Quick to Cut Yields

THOSE not-so-friendly bankers are not waiting for the Federal Reserve to formally vote to trim short-term interest rates.

- JEFFREY R. KOSNETT

Banks are preemptively paring yields on deposits, keen to shore up their net interest (profit) margins before the Fed cuts what it pays banks to hold funds in reserve.

At its July 30 meeting, members of the Fed’s open market committee voted to hold rates steady—the fifth straight meeting resulting in no changes. Most Fed watchers don’t expect any movement toward lower rates until September.