June 18, 2025 • 11 mins
With Federal Reserve officials signaling an extended hold on interest rates, investors and economists will look to Chair Jerome Powell this week for clues on what might eventually prompt the central bank to make a move, and when.
A fourth straight meeting without a cut could provoke another tirade from President Donald Trump. But policymakers have been clear: Before they can make a move they need the White House to resolve the big question marks around tariffs, immigration and taxes. Israel’s attacks on Iranian nuclear sites have also introduced another element of uncertainty for the global economy.
Frank Sorrentino, Founder and CEO of ConnectOne Bankcorp previews what the Fed may do at the next FOMC meeting.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. You're listening to Bloomberg
Business Week with Carol Masser and Tim Stenoveek on Bloomberg Radio.
We are all in on the FED today, although it
may not seem like it because of the conflict overseas.
Speaker 2 (00:18):
Kind of amazing right now.
Speaker 1 (00:19):
Any other day, Yeah, Yeah, where we'd be on the Tuesday,
the first day of a two day policy meeting, we'd
spend quite a bit of time talking about the food
or were we.
Speaker 2 (00:27):
Talk about the market? Kind of marking time because it's
just waiting FED decision. But that's not necessarily been the
trade today.
Speaker 1 (00:33):
One person we go to regularly for his view on
the economy and rates around FED decisions is Frank Sorrentino.
He's chairman and CEO at the publicly held New Jersey
based community bank connect One Bank Corp. W's the parent
of Connect One Bank. We're talking small businesses, construction companies
among its customers. The bank recently merged with First Long
(00:53):
Island Corp. Which brings its total assets, Carol to about
fourteen billion dollars.
Speaker 2 (00:58):
All right, Frank is back with us and he is
in Melville, Long Island. Frank good to have you here.
We always appreciate getting some time to check in with
you and see what you are seeing. It's all fast
and very Carolyn. It's good to have you. Would you
like to, like just take a long nap and wake
up and I don't know, twenty twenty six or twenty
twenty seven, tell us about your world right now and
(01:18):
what you're seeing, because you you tended to be pretty optimistic.
Speaker 3 (01:22):
Yeah, it's interesting. You know, if you go back a
couple of months the Liberation Day and you took a
nap on that day and woke up today, you'd say, well,
I don't know, things don't look too bad. Other than
what's going on overseas, the market is pretty much rebounded
or recovered most of the ground. You know, people feel
the economy is on more sturdy ground today than they
thought in those weeks after, you know, after that news.
(01:46):
But the economy still is quite robust in the markets
that we serve, as you know. Connect one is in
the New York metro market in New Jersey, New York
now Long Island in a pretty big way, and the
majority over the client base that we have is still
seeing strong demand for products and services. A lot of
service oriented businesses. There's still an enormous amount of demand
(02:10):
for housing, for apartments, for all types of construction, warehousing,
even office which has, as you know, been you know,
the subject of you know, a lot of conversation over
the last two or three years or so, has is
seeing a tremendous rebound as we're moving, you know, through
(02:31):
this period of time.
Speaker 1 (02:32):
I'm getting to a few questions from loyal listener Ryan
Horan reaching out over the instant Bloomberg. He's glad we're
talking to you because a great check of small business
and the consumer. He's curious about any worrying trends or
any pullback in underwriting that you're seeing. Are you adding
to reserves to shield any non performing loans?
Speaker 3 (02:52):
You know, most banks are reporting that they're seeing a
fairly benign credit perspective out there. I know there was
a lot of terror of talk UH sixty days or
so ago, and a lot of investors were very concerned
about how tariffs may impact bank earnings, you know, through
the through the credit cycle, through any sort of credit
cycle that's really quite diminished these you know, recently in
(03:16):
the in the past few days or weeks, UH and
banks are still reporting a fairly benign credit period. There
are certainly one offs, as we would always expect there
to be, and there's appropriate reserving going on at most banks,
but there's nothing systematic that's out there that were where
banks are feeling that there are particular segments of the
(03:37):
market that are showing more signs of weakness than than normal.
Speaker 2 (03:41):
Why is that.
Speaker 3 (03:44):
Negative? When we start, I always start with we have
a four percent unemployment rate. Everyone has a job and
anyone who's looking for a job can get a job,
and so things are good. People are getting raised, there's,
you know, plenty of opportunity in the market. There's been
(04:06):
an enormous amount of liquidity put in the market over
the last dozen years or so. That is just driving
our economy to all time highs. The market is reacting
to that. You can't buy a car, you get people
are waiting in line for homes and apartments. Luxury goods
are on fire. You go to the airport, you can't
(04:28):
get on a plane. It's the economy. I keep saying
the economy is robust, and everyone keeps challenging me why
I use that word. Well, it just is. And so
all of these things are driving GDP is growing it
over three three and a half percent. That's what's driving
what's going on, notwithstanding all the news that you're hearing about,
(04:49):
you know a lot of global issues and other you
know political you know craziness that's going on in the marketplace.
Speaker 2 (04:56):
But what do you make you know, we talked the
retail sector earlier with Dana Tel and we talked about
everyone trading down. So you're seeing discount retail doing better
than most airlines pulling guidance it. It feels like there's
stuff brewing. And I think it's safe to say that
(05:17):
employers are really gun shy about letting go of workers.
There is some labor hoarding going on because they remember
all too well, Frank, what happened after COVID and nobody
could find workers, right. So I just you know, I
just wonder if you've seen a lot of economies. I
know I ask you this all the time, but I
just do wonder. Are you hearing anything anecdotally where people
(05:40):
are like, we're a little nervous, and you know these
tariffs are yeah.
Speaker 3 (05:45):
Yeah, I think we are seeing consumers being a bit
more price sensitive, and I think they are, you know,
maybe not spending as lavishly as they might have in
the past, and they got a little shook up with
the tariffs, and they're looking at some specific products that
you know, may have changed in price. There's been some
(06:05):
hoarding going on that I do think impacted some of
that consumer spending. I know for a fact that's impacted
you know, building supplies and building goods. You know, people
front loaded buying things and anticipation of the tariffs, so
there's a lot of turbulence going on in the marketplace today.
My read, however, is though if you strip out you know,
(06:29):
some of the you know, gas and teraf related items
out of the consumer spending, you'll actually see numbers were
actually up a bit, not down. And even what they're
reporting that that you know, the consumer spending was down
a bit, it's down less than one percent or something percent,
So it's not a it's not a seat change that's
(06:51):
going on. There is you know, some volatility here, but overall,
I still see I don't I do not see a recession,
and I still see a fairly robust economy ahead.
Speaker 1 (07:03):
You know, we're talking to you on Tuesday, June seventeenth,
the day before we hear from FED chair J. Powell.
We don't know what he's going to say. I think
I know what he's going to say to some question
when he answered some questions specifically about politics and his
own future, because he said those same answers for months.
But Frank, I'm curious what you see of the as
the path of the Federal reserve for the remainder of
(07:26):
the year. Give us your dot plot.
Speaker 3 (07:29):
Well, based on what I just said to you. If that,
if that in fact is what's going on in the economy,
then the expectation has to be that the Fed does
not lower rates because the economy is still quite strong,
and so my belief would be that you'll see a
You will definitely see some commentary about the uncertainty that
(07:51):
lies in the marketplace as we move forward. There are
lots of things to be uncertain about, you know, tariffs
being won, the war in the Middle East, the war
in Ukraine, and how those things are impacting you know,
gasoline prices, which happen to be down, but you know
could rise dramatically depending on where things go. So there's
going to be a lot of things that are inputs
(08:13):
that the FED will be looking at that will determine
what's going to happen in the future, and they may
give some guidance about what they think those things would
be going forward. The market expects the FED to cut
at least one, if not two, times this year. I
believe it'll be closer to one. And be careful what
you wish for. I do believe that again, this economy
(08:37):
will continue to roll on and the FED is going
to have a tough time to lower interest rates as
we move through this cycle.
Speaker 2 (08:43):
Frank, I do wonder too. You know, this was an
interesting past earning cycle where we actually did have folks
give you two scenarios like, if everything's good, here's what
our numbers will be. If they're not, here's you know
where they will be, and quite arrange. And I'm not
saying everybody did that, but it was just for those
of us who have covered publicly held companies for a
long time and earn the earning season. I don't remember
(09:04):
people doing that. I've seen people pulling guidance a lot,
but not giving scenarios. Do how many I'm curious about
the conversation do you have with your team. Do you
talk about a lot of different scenarios in this environment,
because it could go a lot of different ways, or no,
you feel much more confident to say this is probably
the course, and here's why we can make decisions based
(09:25):
on this course.
Speaker 3 (09:26):
We definitely have those discussions. We're definitely keeping our ear
close to what's happening. And the thing that I constantly
bring back to the table is, let's listen to what
our clients are telling us. And so, you know, it's
one thing for us to predict what we think is
going to happen based on facts, figures, whatever, but hearing
(09:48):
in from our clients and what they're experiencing in each
of the various segments that we do business with, to me,
is much more important than any few we may have
on our own. So we're still hearing that folks in
general are in good shape. There's a fair amount of
(10:08):
liquidity still in you know, folks checking accounts and their
ability to borrow still remains strong. And so we continue
to see a fairly robust economy going forward. And that's
what we're modeling for and that's what we're predicting for
the future.
Speaker 1 (10:26):
Some people say uncertainty. Frank's word is robust. That's the
word he is over and over again.
Speaker 2 (10:32):
You're existent you've been consistent.
Speaker 3 (10:34):
And uncertainty is is a challenge though, and it is
impacting you know, people's decision making ability. And so you know,
one of the things that I always look at and
always counsel people is, hey, look at what's really going
on on the ground, and you know, try not to
get caught up in all the headlines of you know,
what may be going on around you that don't that
(10:56):
doesn't necessarily impact you. I've had conversations with clients we're
talking to me about tariffs, and tariffs don't actually impact
their business, right, So right, I'm saying, well, okay, why
are we focused on that? So uncertainty absolutely can change
the direction of the economy.
Speaker 2 (11:11):
Yep, sentiment can be pretty strong, right, and uncertainty certainly
plays into something like that. Hey, Frank, as always, thank you,
Thank you. Frank Sorrentino, chairman CEO at the publicly held
In Jersey based community bank connect One Bank, or as
we said, and like to remind you it is a
parent company of connect One Bank.
Bloomberg Audio Studios, Podcasts, radio news. You're listening to Bloomberg
Business Week with Carol Masser and Tim Stenoveek on Bloomberg Radio.
We are all in on the FED today, although it
may not seem like it because of the conflict overseas.
Speaker 2 (00:18):
Kind of amazing right now.
Speaker 1 (00:19):
Any other day, Yeah, Yeah, where we'd be on the Tuesday,
the first day of a two day policy meeting, we'd
spend quite a bit of time talking about the food
or were we.
Speaker 2 (00:27):
Talk about the market? Kind of marking time because it's
just waiting FED decision. But that's not necessarily been the
trade today.
Speaker 1 (00:33):
One person we go to regularly for his view on
the economy and rates around FED decisions is Frank Sorrentino.
He's chairman and CEO at the publicly held New Jersey
based community bank connect One Bank Corp. W's the parent
of Connect One Bank. We're talking small businesses, construction companies
among its customers. The bank recently merged with First Long
(00:53):
Island Corp. Which brings its total assets, Carol to about
fourteen billion dollars.
Speaker 2 (00:58):
All right, Frank is back with us and he is
in Melville, Long Island. Frank good to have you here.
We always appreciate getting some time to check in with
you and see what you are seeing. It's all fast
and very Carolyn. It's good to have you. Would you
like to, like just take a long nap and wake
up and I don't know, twenty twenty six or twenty
twenty seven, tell us about your world right now and
(01:18):
what you're seeing, because you you tended to be pretty optimistic.
Speaker 3 (01:22):
Yeah, it's interesting. You know, if you go back a
couple of months the Liberation Day and you took a
nap on that day and woke up today, you'd say, well,
I don't know, things don't look too bad. Other than
what's going on overseas, the market is pretty much rebounded
or recovered most of the ground. You know, people feel
the economy is on more sturdy ground today than they
thought in those weeks after, you know, after that news.
(01:46):
But the economy still is quite robust in the markets
that we serve, as you know. Connect one is in
the New York metro market in New Jersey, New York
now Long Island in a pretty big way, and the
majority over the client base that we have is still
seeing strong demand for products and services. A lot of
service oriented businesses. There's still an enormous amount of demand
(02:10):
for housing, for apartments, for all types of construction, warehousing,
even office which has, as you know, been you know,
the subject of you know, a lot of conversation over
the last two or three years or so, has is
seeing a tremendous rebound as we're moving, you know, through
(02:31):
this period of time.
Speaker 1 (02:32):
I'm getting to a few questions from loyal listener Ryan
Horan reaching out over the instant Bloomberg. He's glad we're
talking to you because a great check of small business
and the consumer. He's curious about any worrying trends or
any pullback in underwriting that you're seeing. Are you adding
to reserves to shield any non performing loans?
Speaker 3 (02:52):
You know, most banks are reporting that they're seeing a
fairly benign credit perspective out there. I know there was
a lot of terror of talk UH sixty days or
so ago, and a lot of investors were very concerned
about how tariffs may impact bank earnings, you know, through
the through the credit cycle, through any sort of credit
cycle that's really quite diminished these you know, recently in
(03:16):
the in the past few days or weeks, UH and
banks are still reporting a fairly benign credit period. There
are certainly one offs, as we would always expect there
to be, and there's appropriate reserving going on at most banks,
but there's nothing systematic that's out there that were where
banks are feeling that there are particular segments of the
(03:37):
market that are showing more signs of weakness than than normal.
Speaker 2 (03:41):
Why is that.
Speaker 3 (03:44):
Negative? When we start, I always start with we have
a four percent unemployment rate. Everyone has a job and
anyone who's looking for a job can get a job,
and so things are good. People are getting raised, there's,
you know, plenty of opportunity in the market. There's been
(04:06):
an enormous amount of liquidity put in the market over
the last dozen years or so. That is just driving
our economy to all time highs. The market is reacting
to that. You can't buy a car, you get people
are waiting in line for homes and apartments. Luxury goods
are on fire. You go to the airport, you can't
(04:28):
get on a plane. It's the economy. I keep saying
the economy is robust, and everyone keeps challenging me why
I use that word. Well, it just is. And so
all of these things are driving GDP is growing it
over three three and a half percent. That's what's driving
what's going on, notwithstanding all the news that you're hearing about,
(04:49):
you know a lot of global issues and other you
know political you know craziness that's going on in the marketplace.
Speaker 2 (04:56):
But what do you make you know, we talked the
retail sector earlier with Dana Tel and we talked about
everyone trading down. So you're seeing discount retail doing better
than most airlines pulling guidance it. It feels like there's
stuff brewing. And I think it's safe to say that
(05:17):
employers are really gun shy about letting go of workers.
There is some labor hoarding going on because they remember
all too well, Frank, what happened after COVID and nobody
could find workers, right. So I just you know, I
just wonder if you've seen a lot of economies. I
know I ask you this all the time, but I
just do wonder. Are you hearing anything anecdotally where people
(05:40):
are like, we're a little nervous, and you know these
tariffs are yeah.
Speaker 3 (05:45):
Yeah, I think we are seeing consumers being a bit
more price sensitive, and I think they are, you know,
maybe not spending as lavishly as they might have in
the past, and they got a little shook up with
the tariffs, and they're looking at some specific products that
you know, may have changed in price. There's been some
(06:05):
hoarding going on that I do think impacted some of
that consumer spending. I know for a fact that's impacted
you know, building supplies and building goods. You know, people
front loaded buying things and anticipation of the tariffs, so
there's a lot of turbulence going on in the marketplace today.
My read, however, is though if you strip out you know,
(06:29):
some of the you know, gas and teraf related items
out of the consumer spending, you'll actually see numbers were
actually up a bit, not down. And even what they're
reporting that that you know, the consumer spending was down
a bit, it's down less than one percent or something percent,
So it's not a it's not a seat change that's
(06:51):
going on. There is you know, some volatility here, but overall,
I still see I don't I do not see a recession,
and I still see a fairly robust economy ahead.
Speaker 1 (07:03):
You know, we're talking to you on Tuesday, June seventeenth,
the day before we hear from FED chair J. Powell.
We don't know what he's going to say. I think
I know what he's going to say to some question
when he answered some questions specifically about politics and his
own future, because he said those same answers for months.
But Frank, I'm curious what you see of the as
the path of the Federal reserve for the remainder of
(07:26):
the year. Give us your dot plot.
Speaker 3 (07:29):
Well, based on what I just said to you. If that,
if that in fact is what's going on in the economy,
then the expectation has to be that the Fed does
not lower rates because the economy is still quite strong,
and so my belief would be that you'll see a
You will definitely see some commentary about the uncertainty that
(07:51):
lies in the marketplace as we move forward. There are
lots of things to be uncertain about, you know, tariffs
being won, the war in the Middle East, the war
in Ukraine, and how those things are impacting you know,
gasoline prices, which happen to be down, but you know
could rise dramatically depending on where things go. So there's
going to be a lot of things that are inputs
(08:13):
that the FED will be looking at that will determine
what's going to happen in the future, and they may
give some guidance about what they think those things would
be going forward. The market expects the FED to cut
at least one, if not two, times this year. I
believe it'll be closer to one. And be careful what
you wish for. I do believe that again, this economy
(08:37):
will continue to roll on and the FED is going
to have a tough time to lower interest rates as
we move through this cycle.
Speaker 2 (08:43):
Frank, I do wonder too. You know, this was an
interesting past earning cycle where we actually did have folks
give you two scenarios like, if everything's good, here's what
our numbers will be. If they're not, here's you know
where they will be, and quite arrange. And I'm not
saying everybody did that, but it was just for those
of us who have covered publicly held companies for a
long time and earn the earning season. I don't remember
(09:04):
people doing that. I've seen people pulling guidance a lot,
but not giving scenarios. Do how many I'm curious about
the conversation do you have with your team. Do you
talk about a lot of different scenarios in this environment,
because it could go a lot of different ways, or no,
you feel much more confident to say this is probably
the course, and here's why we can make decisions based
(09:25):
on this course.
Speaker 3 (09:26):
We definitely have those discussions. We're definitely keeping our ear
close to what's happening. And the thing that I constantly
bring back to the table is, let's listen to what
our clients are telling us. And so, you know, it's
one thing for us to predict what we think is
going to happen based on facts, figures, whatever, but hearing
(09:48):
in from our clients and what they're experiencing in each
of the various segments that we do business with, to me,
is much more important than any few we may have
on our own. So we're still hearing that folks in
general are in good shape. There's a fair amount of
(10:08):
liquidity still in you know, folks checking accounts and their
ability to borrow still remains strong. And so we continue
to see a fairly robust economy going forward. And that's
what we're modeling for and that's what we're predicting for
the future.
Speaker 1 (10:26):
Some people say uncertainty. Frank's word is robust. That's the
word he is over and over again.
Speaker 2 (10:32):
You're existent you've been consistent.
Speaker 3 (10:34):
And uncertainty is is a challenge though, and it is
impacting you know, people's decision making ability. And so you know,
one of the things that I always look at and
always counsel people is, hey, look at what's really going
on on the ground, and you know, try not to
get caught up in all the headlines of you know,
what may be going on around you that don't that
(10:56):
doesn't necessarily impact you. I've had conversations with clients we're
talking to me about tariffs, and tariffs don't actually impact
their business, right, So right, I'm saying, well, okay, why
are we focused on that? So uncertainty absolutely can change
the direction of the economy.
Speaker 2 (11:11):
Yep, sentiment can be pretty strong, right, and uncertainty certainly
plays into something like that. Hey, Frank, as always, thank you,
Thank you. Frank Sorrentino, chairman CEO at the publicly held
In Jersey based community bank connect One Bank, or as
we said, and like to remind you it is a
parent company of connect One Bank.
Hosts And Creators
Tim Stenovec
Carol Massar
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