what if a supporting leg fails?
Rate path
holds
Trading revenue
holds
Record bank rally as a good-news trap resting on rate path and trading revenue durability
two supporting legs carry the sector
each priced into record highs as if it persists
Rate path
higher-for-longer sustains NII
Trading revenue
one-off exceptional quarter
Record prices
~1.75x book
KBW +15% YTD
support assumed durable
Durability
assumption threshold
Prices hold
both legs persist
Sector reprices
rate-sensitivity flips
Portfolios absorb
bank income, concentrated
the durability assumption is the sector's central forward risk — a prospective risk, not a realized decline