North American banks have made an extraordinary $1 trillion in profits during two and a half years of high interest rates, according to an analysis by the Financial Times, during a period when the financial sector did not fully reflect the global economy. Increased deposit rates paid to savers.

While interest rates paid on some deposits have been increased in line with the Fed's rates, reaching more than 5%, the vast majority, especially at major banks such as JPMorgan Chase and Bank of America, have had much lower rates.

In the second quarter, North American banks were paying an average annual interest rate of just 2.2%, according to the paper’s analysis. That’s 0.2% higher than they paid two years ago, but a far cry from the Federal Reserve’s 5.5% rate. At JPMorgan and Bank of America, the annual deposit rate was 1.5% and 1.7%, respectively.

This difference between what banks earned from interest and the low interest rates on deposits allowed the financial sector to make extraordinary profits of $1.1 billion, according to the Financial Times. This is a different reality from what happened in Europe, where some governments imposed taxes on extraordinary profits from banks that benefited from high interest rates.

After the European Central Bank reversed monetary policy earlier this summer, it was the turn of the central bank led by Jerome Powell to make the move this week. Interest rates, which had been in a range of 5.25% to 5.5% for more than a year, were cut to 4.75% to 5%, a 50 basis point cut. This was when most of the market was pricing in a 25 basis point cut.

Economists interviewed by Bloomberg believe that upcoming economic data, especially on inflation, will support this rise.