So Goes Main Street, So Goes the Bank
An image of small town mainstreet
When I entered banking, I knew I wasn’t going to be a “herd” banker. My leadership and knowledge were forged differently—my path was different. I was an accidental banker.
That said, I wanted to understand what bankers were reading, watching, and how they thought about things.
I remember during my United Way campaign days, visiting the CEO and our friends at Stifel. They had big TVs everywhere, constantly streaming market data. So, when I settled into my big bank chair, I figured I’d follow suit—at least in this way.
I found the first market-scrolling station I could, which was CNBC. And I haven’t turned it off since.
But when I first started watching CNBC, I was confused. Let me tell you why.
I get up early, so I would always catch the implied openings—those numbers flashing in the corner of the screen, showing where the Dow, S&P, or 10-year Treasury yield were expected to start the day.
Maybe the Dow was set to open up 146 points (green). Maybe the S&P was up 12. The 10-year yield? Flashing red or green—meaning it was expected to move up or down. And the 2-year yield? Same thing—red or green, signaling movement before the market even opened.
I was torn.
How was I supposed to think about these numbers?
I wondered, how does this impact me—someone on Main Street? Then, I had to wonder, how does this impact the bank?
Here’s the challenge: Even when something benefits the bank in the short term, the long-term impact on Main Street is what ultimately matters.
It took me a while to realize that these early morning snapshots were really just reflections of what happened overnight in the markets. They weren’t set in stone—just predictions of how things might open.
But once the markets open? Anything can happen.
What Does It Mean When Yields Are Green and Up?
Let’s break it down in simple terms.
1. Implied Opening for Yields
These numbers come from pre-market trading in bond futures, which indicate where bond yields might start the trading day.
The bond market opens at 8:00 AM ET, an hour and a half before the stock market.
2. Green & Up
If CNBC says the 2-year and 10-year yields are green and up, it means their yields are expected to rise at the open.
But here’s something key: Yields and bond prices move like a seesaw—when yields rise, bond prices fall.
Why Do Yields Move?
Yields rise when investors demand higher returns for lending their money. Here’s why that happens:
Stronger economic data → The economy is growing, so investors expect higher interest rates.
Inflation Fighting Fed expectations → If the Fed signals fewer rate cuts or potential hikes, yields rise.
Inflation fears → When inflation rises, investors demand higher yields to compensate for the loss of purchasing power.
Increased government debt issuance → More bonds flooding the market can push prices down and yields up.
What’s the Impact on Markets?
Rising 2-year yield → Reflects short-term interest rate expectations (think: Fed policy).
Rising 10-year yield → Reflects long-term growth and inflation expectations.
Why Should You Care?
Because these numbers affect your wallet.
If the 2-year Treasury yield jumps, credit card interest rates go up, meaning you’ll pay more in interest on balances.
If the 10-year Treasury yield rises, mortgage rates go up, making home loans more expensive.
For example, a 1% increase in mortgage rates can mean $200 more per month on a $300,000 loan.
The Bank vs. Main Street
Now, here’s where things get interesting.
The impact on Main Street and the bank can diverge—at least at first.
If the 2-year Treasury yield rises, it increases the cost of credit cards and other short-term loans.
For a bank with lots of credit card lending, that can mean higher profits in the short term, because those rates adjust automatically.
It’s the same with mortgages. I remember the head of our mortgage division once told me:
"Just watch the 10-year Treasury. If it goes up or down, it will tell you whether it’s getting more expensive or less expensive for Main Street."
That’s all I did to learn—just watched the 10-year.
Most banks benefit when rates go up—but only if people on Main Street keep buying homes. Banks win because of volume—more home loans mean more business. But that’s where it gets tricky.
Most mortgages are fixed-rate, so banks can only profit so much from rising rates unless they hold adjustable-rate products like the one I had—a 5-year ARM (Adjustable-Rate Mortgage).
And here’s the catch: If rates rise before you can refinance, the bank wins—that’s the game.
My rate was locked in for five years, then adjusted based on whatever the market dictated at the time. If rates spiked before I had a chance to refinance? My payment would go up, and that extra cost would go straight to the lender.
That’s why Main Street and banks are tied together—if rates rise too much and people can’t afford their payments, what once looked like a profitable rate environment for banks can quickly turn into a problem.
Ultimately, Main Street and banks are tied together.
If rates go up too much, Main Street can’t pay. And when people stop paying, what once looked like a profitable rate environment for banks turns painful.
Final Lesson: So Goes Main Street, So Goes the Bank
So, should you care about the flashing numbers on CNBC?
Yes—because they affect your money.
If rates go up, borrowing costs rise.
If rates fall, it might be time to refinance.
If you’re in the market for a home, car, or business loan, these numbers directly impact what you’ll pay.
The bottom line? The health of Main Street is the true barometer of where things are headed.
What do you think? Have you ever been confused by financial news? How do you think rising interest rates impact your finances or business? Drop a comment and share your perspective. If this post sparked one thought pass it along to your network—let’s keep the conversation going!
#FinancialLiteracy #InterestRates #MainStreetEconomy #MoneyMatters #BankingInsights
About Me:
Hi, I’m Orvin Kimbrough—volunteer, board director, and chairman & CEO of Midwest BankCentre. I help professionals scale confidence, leadership, and influence by driving mindset shifts, expanding networks, sharing knowledge, and encouraging bold action.
I share insights on leadership, resilience, and personal growth—rooted in my journey from foster care to CEO. 📖 Twice Over a Man, my recently released book, has been described as inspiring, honest, and transformative. Readers call it a leadership manual wrapped in a powerful, relatable memoir of perseverance and faith.
For more Reflections (and broader lessons learned), visit orvinkimbrough.com