Banks hope cut eventually lifts demand for loans

The bad: Short-term pressures will remain. Banks have already been socked hard by the mortgage crisis and quarter after quarter of asset write-downs as investors try to figure out what banks’ loan portfolios are really worth. And the cost of getting deposits what banks pay in interest on savings, checking and certificate of deposit accounts will remain higher than what they can charge on loans in the immediate future.

For some banks, the rate cut means that they will lower their prime rates in tandem SunTrust Banks did so Tuesday but they won’t be able to cut deposit rates as quickly because of competition for those deposits.