RE:I bought moreThe only thing you really have 'wrong' is in assuming that raising rates automatically means banks make higher profits. Banks make profits off of the split between what they pay and what they can charge, not merely on the top side. More important to bank profits is volume, how much money they can churn in and out. Moving more mpney at a lower split can often result in higher profits. And in a higher inflation model, central banks and other factors can often result in more money being kept in matresses than is being floated around the markets.
You're not necessarily wrong, except in making an assumption that may not come to fruition. This is FAR from normal times, i don't think old norms on how the market behaves is at all reliable. I wouldn't be surprised if in fact the markets react exactly opposite how they are expected to react. Cross your fingers.