Bank stocks rally to pre-crisis levels after Fed meeting

Shares in U.S. banks were rallying strongly on Thursday after the Federal Reserve signaled potential interest rate cuts in 2024 with the sector returning to its highest level since early March just before a crisis that put some banks out of business. While higher interest rates boost lenders' profits to an extent they can also result in weakening of loan demand and pressure for banks to raise deposit rates they pay customers. In March three medium-sized banks collapsed under pressure from rising interest rates and as customers moved their deposits to seek stability as well as higher returns.