Even banks can't outrun inflation
For the nation’s largest banks, inflation may be too much of a good (for them) thing.
Driving the news: JPMorgan Chase and Citigroup shares fell today — despite delivering solid quarterly revenue and profit — amid concerns that the banks won’t be able to outrun inflation.
Be smart: Inflation in moderation is typically a good thing for banks as it often triggers higher interest rates, leading to better revenue and earnings.
- But with the Consumer Price Index reaching a 40-year high of 7%, JPMorgan warned it may get singed.
- “Elevated inflationary pressures on expenses could more than offset the rates benefit,” JPMorgan CFO Jeremy Barnum said on a conference call.
But, but, but: Bank execs otherwise painted an optimistic economic picture.
- Citigroup, JPMorgan and Wells Fargo said outstanding loans increased from the previous quarter.
- "The consumer is very strong," JPMorgan CEO Jamie Dimon told investors.