Do banks’ funding costs respond symmetrically to policy rate increases and decreases?

Using data on U.S. banks’ funding costs, we study how policy rate changes pass through to deposit, non-deposit, and total funding costs when rates rise and when they fall. We find largely similar adjustments across tightening and easing phases: initial differences in the response of deposit and total funding costs are small and short-lived, and longer-horizon changes are statistically similar. Robustness checks with alternative sample start dates point to the same symmetric behavior in larger, more recent samples. Taken together, the results suggest that the familiar “rockets and feathers” asymmetry documented for advertised deposit rates does not extend to realized funding costs.