Deposit Pricing Pressure Builds As Loan Growth Accelerates

Deposit costs rose 3 bps to 2.12% in the third quarter even as the effective fed funds rate declined, S&P Global Market Intelligence reported. Additionally, loan growth outpaced deposit growth through much of the second half of the year, increasing the risks that credit demand could intensify deposit competition and limit banks’ flexibility to reduce funding costs.

A related S&P article discussed the year-end acceleration in loan growth, which reached roughly 5.3% year over year by Dec. 31, 2025. Analysts expect momentum to continue in 2026, supported by a steeper yield curve, improved macroeconomic stability, and easing regulatory pressures, among other factors.