Betsy Graseck: So two questions. One, just as we think about the margin and the net interest margin, interest margin outlook, — can you give us a sense as to how you’re thinking about deposit betas and how that’s likely to grow here over the course of the year. I noticed you talked a little bit earlier about deposit growth was really strong. Maybe give us a sense as to which types of deposits you’re really leaning into at this stage. And then help us understand how asset yields are likely to trend given — forward curve, I’m assuming is the base case, but tell me if you have a different point of view on that. Thanks.
Andrew Young: Yes. Betsy, I’ll start with your last question first, which is we are following the forward curve, assuming 50 bps here in the first quarter and holding flat throughout €˜23 before coming down in €˜24. With respect to how we’re thinking about beta and asset yields as components of NIM, as we get into the latter part of this rate cycle, lagged deposit rates really have a bigger impact than the asset yields that reprice more quickly and did so over the last couple of quarters as the Fed was moving rapidly. And so, there’s a bit of that sequential dynamic going on. In terms of thinking about overall deposit beta and product mix, roughly 85% of our deposits are in consumer. It’s where our focus lies. And so if you just look at the cumulative deposit beta for the total company, it’s around 35%, was low-20s last quarter.
But if you look at the last increasing rate cycle, I think the terminal beta was around 41. So, I could see a terminal beta being somewhere above that, just given competitive dynamics in the marketplace at this point. So, I would say the net of all of those factors is likely to be a modest headwind to NIM. We talked last quarter about balance sheet mix — and we are largely back to a pre-pandemic balance sheet mix from where we were a year ago. And frankly, our NIM is roughly in a similar spot. So, I would say balance sheet mix over a multiple quarter period isn’t likely to be a big driver, unless we just see outsized growth in the higher-margin card business. And then, the other factor that could prove to be a tailwind to potentially offset a little bit of the modest headwind that probably comes from the beta dynamics that I described is we could also see a bit of an increase in card revolve rates from where they are today.
So, all of those things are — just to leave you with kind of a net impression that there are headwinds and potentially some tailwinds. But the one thing I will just note as we look ahead to the first quarter, as a reminder, in the way we calculate NIM day count has an effect. So, the one thing we know for sure is we’ll have a 14 basis-point or so headwind in Q1 due to having two fewer days in the quarter.
Betsy Graseck: Okay. That’s super helpful color. As a follow-up, I just wanted to get a sense as to how you’re thinking about the outlook for marketing, obviously, a critical driver of growth, and I know it’s been something that you’ve been very successful with in generating that top of wallet customer. But just wanted to see how we should think about that investment as we go into the next year with this NIM headwind, et cetera. Thanks.
