NEW YORK (AP) – With oddsmakers all but pulling a summer rate hike off the table after a terrible U.S. jobs report and a wash of other disheartening economic data, the nation’s biggest banks took pummeling from investors Friday.
The financial sector has been waiting seven years for the Federal Reserve to increase the short-term interest rates substantially, which allows banks to follow with higher rates for borrowing.
The Fed raised rates at the end of last year, but just barely.
The report from the Labor Department on Friday, showing that there was a drastic slowdown in hiring by U.S. employers in May, rewrote the story many had expected to unfurl later this month and in July when the Fed meets.
Financials were the biggest decliner by far of the 10 Standard & Poor’s sectors Friday, with the biggest banks leading the way down.