CFG Shares Plunge 1.52% to 2025 Low on Fed Rate-Cut Jitters, Economic Risks

Shares of Citizens Financial Group (CFG) fell 1.52% on Thursday, marking its lowest level since September 2025, with an intraday decline of 2.40%. The selloff reflects investor concerns over the Federal Reserve’s anticipated rate cut and broader economic uncertainties.

The Fed’s potential 0.25 percentage point rate reduction, expected at its September 17 meeting, poses a direct threat to CFG’s net interest margins. Lower rates would compress the spread between loan yields and deposit costs, pressuring profitability. While the bank has already adjusted its high-yield savings account rates to 3.50% APY, aligning with industry trends, further cuts could force additional margin compression or a shift toward fee-based services to offset losses.

Competitive pressures from online banks offering higher APYs, such as 4.46% at Axos Bank, add to the challenge. CFG’s 3.50% rate, while FDIC-insured and accessible with a $0.01 minimum, lags behind top-tier fintechs. This could strain deposit growth, critical for funding lending activities, as customers seek better returns elsewhere.

Macroeconomic risks, including slowing productivity and rising unemployment risks highlighted by Fed Chair Jerome Powell, amplify market volatility. A weaker economy could increase credit risk and loan defaults, further weighing on CFG’s balance sheet. The stock’s recent 13% swing between $46.93 and $50.77 underscores investor anxiety ahead of the Fed’s decision, with outcomes deviating from expectations likely to trigger further price swings.