Jan 14, 2022 - Economy

Even banks can't outrun inflation

Nathan Bomey

A person walks past Chase Bank. — Photo: Victor J. Blue/Bloomberg via Getty Images

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.

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Even banks can't outrun inflation

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