Jan 14, 2022 - Economy & Business

Even banks can't outrun inflation

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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