October 2, 2024 U.S. bank deposits increased in the fourth quarter of 2023 after six consecutive quarters of decline. This continuous decline was the result of the US Federal Reserve shrinking its balance sheet (known as quantitative tightening) and increasing interest rates. Partner Szilard Buksa and colleagues explain. Economists expect quantitative tightening to be phased out by 2025. Banks of all asset sizes therefore saw deposit growth in the fourth quarter of 2023.
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A series of vertically stacked bar charts depicting total deposits at U.S. financial institutions from the fourth quarter of 2016 to the first quarter of 2024. The data is divided into four categories based on asset size: small (less than $10 billion), mid-cap. ($10 billion to $100 billion), hyperregional (>$100 billion to $1 trillion), and largest (>$1 trillion). Total deposits increased steadily from Q4 2016 to Q1 2022, increasing from approximately $13 trillion to approximately $20 trillion. Deposits then declined for six consecutive quarters, dropping to about $18.5 trillion by Q3 2023. Deposits then began to slowly increase over the next two quarters.
Source: Federal Financial Institutions Examination Council.
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To read this article, see “U.S. Bank Commercial Deposits Return to Growth Trajectory” on August 6, 2024.
