Moody’s cut the ratings of 10 banks by one notch and placed six banking giants, including Bank of New York Mellon (BK.N), US Bancorp (USB.N), State Street (STT.N) and Truist Financial (TFC.N) on review for potential downgrades.

“Many banks’ second-quarter results showed growing profitability pressures that will reduce their ability to generate internal capital,” Moody’s said in a note.

“This comes as a mild U.S. recession is on the horizon for early 2024 and asset quality looks set to decline, with particular risks in some banks’ commercial real estate (CRE)portfolios.”

[The end of the pandemic lockdown has not yet reinvigorated CRE demand — and likely never will. This may yet turn out to be a bubble, although probably not on the same scale as the mortgage-backed securities of 2008. It’s still another way in which the lockdowns — largely unnecessary and entirely so after health care resources were marshaled — did a lot more damage than good. — Ed]