Bank Earnings: Rising Rates, Bad Loans, and Economic Dirt Unveiled

American banks, including JPMorgan Chase, Citigroup, and Wells Fargo, are expected to report lower earnings for the third quarter due to shrinking margins and declining loan demand caused by rising interest rates. Higher rates are also anticipated to lead to losses on banks' bond portfolios and funding pressures. While some analysts see a potential short squeeze and relief rally for bank stocks during earnings season, concerns remain about the impact of higher rates on banks' balance sheets, particularly for regional lenders and potential losses in commercial real estate and industrial loans.