“Bove’s remarks come on the heels of the resignation of top Federal Reserve official Daniel Tarullo, an advocate for regulation within the banking industry. Trump recently began the steps necessary to take down parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a piece of legislation that has more stringently regulated the goings on of the financial industry,” according to CNBC.
Bank ETFs are benefiting from speculation that the Federal Reserve will boost interest rates multiple times this year. With a steepening yield curve or wider spread between short- and long-term Treasuries, banks could experience improved net interest margins or improved profitability as the firms borrow short and lend long.
The Fed is believed to be targeting three rate hikes in 2017 while Fed funds futures data currently imply the U.S. central bank will boost borrowing costs twice this year.
For the week ended Feb. 15, XLF added $1.18 billion in new assets, a total surpassed by just one other ETF.
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