Banks rise on Wednesday before the decision on the interest rates of the Fed: Goldman Sachs, JPMorgan

• Goldman and JPMorgan actions advance 2% on Wednesday.
• American regulators are considering reducing a key capital ratio that would help large banks.
• The FOMC will announce the decision on interest rates at 14:00 est.
• The RSIS of the actions of GS and JPM make them seem overwhelmed in the technical graphics.

Goldman Sachs (GS) and JPMorgan (JPM) They are uploading on Wednesday morning, before the afternoon interest rate decision by the Federal Reserve (Fed). The prices of the actions of JPMorgan and Goldman Sachs have risen 2.7% and 2.0%, respectively, at the time of writing this article. The Dow Jones industrial average (DJIA), which includes both, as well as Nasdaq and S&P500, all around 0.4%advances.

At 14:00 EST (18:00 GMT), the Federal Open Market Committee (FOMC) of the FED will announce its determination on the federal funds, which has been stagnant at 4.25% -4.50% throughout the year. The market awaits with great expectation that the Central Bank again maintains the stable rates, but is anxious to see how its points diagram foresees future decisions about rates.

The article also mentioned that the 6% rate for the subsidiaries of banking companies could also be reduced to the same range.

Banks are also rising due to optimism around the US government leans towards the reduction of capital requirements to negotiate US Treasury bonds.

Goldman Sachs and JPMorgan will benefit from the reduction of capital requirements

The Federal Deposit Insurance Corporation, the Fed and the Office of the Comptroller of La Moneda – the three main banking regulators of the US government – are discussing the modification of the capital requirement of 5% that banks must maintain to invest in US Treasury bonds.

Called the improvement or ESLR supplementary leverage ratio, according to Bloomberg reports, the change of rule could reduce that 5% ratio to between 3.5% and 4.5%. This would make the investment in Treasury bonds more lucrative for banks, probably creating a greater demand for them and, therefore, reducing coupon rates.

Regulators will meet on June 25 to discuss the matter, but investors already believe it has a high probability of approval. The Vice President of Supervision of the Fed, Michelle Bowman, highlighted the capital ratio as excessive earlier this year.

However, some other critics mentioned in Bloomberg’s article affirm that when the capital requirement was exempted during Covid 19 in 2020, banks did not take advantage of the change of rule to increase their treasure bond holdings.

JPMorgan and Goldman Sachs shares graphics

Goldman’s actions have been constantly rising since the minimum of rates in early April. The support is much lower in $ 560 and $ 570, according to mobile socks. The Bank will require another great impulse of the Alcistas to re -test their historical maximum, in the low $ 670.

However, the Relative Force Index (RSI) is approaching the territory of overcompra and may require a consolidation period.

GS Shares Daily Chart

JPMorgan’s actions are already very close to their February historical maximum. It seems that it is too close to not trying a new maximum in this region. Simple mobile stockings (SMA) of 50 days and 200 days are close, between $ 242 and $ 254, but their 69 RSI reading makes the action look over and does not provide a good entry point here.