The Fed Did Banks a Solid This Week. More Favors May Be Needed

For banks and other players in the U.S. financial system, the Federal Reserve’s next moves on the size of its balance sheet could matter as much or more than its decisions on rates.

Following the Fed’s

quarter-point rate-cut decision this past week, banks were among the market’s strongest performers. The KBW Nasdaq Bank index was up over 3% for the week, while the S&P 500 was down.