Banks Return To Normalcy, Or At Least, They Think So
Jamie Dimon, the CEO of JPMorgan Chase, said that trading revenue will drop to around $ 6B as the market volatility prompted by the pandemic fades away. Dimon also pared back the bank’s forecast for net interest income to $ 52.5B (from a previous estimate of $ 55B) as it is stockpiling cash in the expectation of rising rates.
“We have a lot of cash and capability and we’re going to be very patient because I think you have a very good chance inflation will be more than transitory,” Jamie Dimon by Rob Lenihan for The Street
At the same time, Mark Mason, the CEO of Citigroup said that consumers, aided by the federal government, have continued to pay down their debt. This could decrease sales for the North American consumer business by around 15%.
BENCHMARK’S TAKE
- With markets at an all-time high and multiples in the upper echelon, we believe volatility could come back as the FED starts raising rates
- Consumers have used their stimulus payments and savings to pay down credit card debt. However, the prospect of rising rates and the return to normalcy could spur consumers to increase spending on durable goods and assets, which may be financed by loans
Disclaimer
Please note that this article does not constitute investment advice in any form. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products.
Credits
Photo by Paul Fiedler on Unsplash.
