Fed's pivot to lower rates could spur more bond restructuring

The Federal Reserve's pivot to decrease interest rates could lead to more structuring of bank bond portfolios as the capital hit associated with those transactions will not be as large. Those actions might still require a bank to raise capital and there have been a number of institutions in the last month that have repositioned their bond portfolios, while attracting outside capital. Even with declines in rates, many institutions likely will opt to wait for their portfolios to season and avoid taking the capital hit associated with a loss trade, but others will see the opportunity to improve their future streams through incremental restructuring.

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Fed's pivot to lower rates could spur more bond restructuring

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