Banks have been blooming in Trump’s economy so far. Here’s what it means

Almost everywhere you look in the world of finance, everything goes surprisingly well – at least for now.

Wall Street is humming Thanks to the boom in trade in shares and bonds, as well as reception in corporations buying competitors and taking huge loans. At the same time, Main Street persists when the American consumer still issues, borrow and pay off loans, according to reports from this week from the largest American banks.

It is an extremely profitable environment for financial companies. Six largest American banks generated about $ 39 billion in profit in the second quarter, exceeding the expectations of analysts and combining over 20% of basic earnings a year ago.

This is an amazing result after the turbulent beginning of the quarter. The period began with shock and immersion of markets on April 2 over the president Donald Trump Huge “Liberation Day” tariffs. Jpmorgan chase Economists said at that time that politics would probably cause a recession this year.

But the markets roared after Trump replied Anxiety signals From American bonds and delayed the most criminal tariffs for most trading partners. Investors started Use Bank results Bank results Bank results show that the binding of tariff rows as a blaster or noise, and corporate leaders come off the side line to stimulate multi -billion transactions.

“See how far the world comes in three months” Wells Fargo banking analyst Mike Mayo said CNBC. “Throughout the quarter, you had the reception of investment banking, increase in loans and optimism in economic scenarios. Here, with a conversation about a recession of almost absent.”

This dynamics was clear at JPMorgan, the largest and most profitable bank in the USA. Produced about $ 15 billion Quarterly profitwhich is almost the same as the next three largest banks connected.

Trade took advantage of the turbulent conditions in this quarter, when Trump was collecting markets with rapidly developing policy statements. But a real surprise came from investment banking, which includes fusion tips, IPO and debt and equity emissions. Revenues in JPMorgan increased by 7%, producing $ 450 million more than expected analysts, just a few weeks after managers had warned about 15% of the inheritance.

“To some extent, the receipt of investment banking fees reflects people accepting uncertainty and decide to go with transactions,” JPMorgan CFO Jeremy Barnum He told journalists on Tuesday. “The corporate community accepted that it just had to move around.”

This means that it is less likely that recession will increase unemployment in the US this year, harming consumers the ability to repay their debts. It was clear at the bank supply For credit losses, which was 14% lower than in the first quarter.

The economy is straight in “Soft landing“Scenario, Barnum told journalists this week.

At the same time, consumers and companies borrow more money from JPMorgan, where loans increased by 5% compared to the year of the year, driven by a growing credit card and wholesale loans, said the bank.

These statistics mean that at least for now banks give a versatile US economy signal in the early months of the second presidency of Trump. Even during the treated turbulence and growing geopolitical risk, the economy has opposed expectations.

“Banks are economically sensitive companies, so the way the economy will operate within the administration will be important for their results,” he said Matt StuckyChief portfolio manager for action at Northwestern Mutual Wealth Management. “The economy is still developing so far.”

The situation made JPMorgan CEO Jamie DimonWho He often warns about the risk he sees, Increasing relatively optimists about the economy.

“It was resistant and I hope it would be like that,” Dimon told journalists this week. “It is always good to hope for the best, prepare for them the best, and we will see … One thing that I would pay attention to, the world is now much larger and much more diverse”, and this makes “a slightly more stable global economy than you had 20 years ago,” he said.

Trump is sweeping invoiceSigned this month, retains the tax rates of corporate and extends business deductions. In addition, deregulatory efforts in various industries will increase the economy, said Dimon.

Last month, the federal reserve published application To change the capital that banks must store in the case of lower risk assets, potentially Release The management said that billions of dollars for banks they could use to increase the redemption of shares, buy competitors or increase loans.

To sum up, it’s hard to imagine a better configuration for banks than now, said Barnum.

“We are basically shooting all cylinders,” Barnum told the analysts. “The rates are a good level for us. Transaction activity is high. Capital markets are very strong. Consumer loan is perfect. Wholesale is perfect.”

Certainly, sentiments can move to decades, and the risk, including inflation, the installation of the US deficit and geopolitical turmoil are still available, noted Barnum.

Wells Fargo General Director Charlie Scharf, freshly removing the yoke of the federal reserve, which limited the balance of his bank at level 2017, sounded with earnings this week. His company recently gave all its employees $ 2000 Milowy stone bonus.

“It’s an extremely interesting and funny time,” Scharf told the analysts on Tuesday. “We are starting to see the flows of deposits, which we talked about. We have a new account increase. We have control costs. The loan will achieve well … We have less restrictions.”

Actions of another former Laggard, Citigroupthis year increased by almost 30% as CEO Jane Fraser She convinces investors who works her feedback.

This week, Fraser sounded like the general director of the attack, revealing a new luxury bank credit card and plans to issue a civil map Stablecoin. It also surprised the resistance of the US economy.

“The strength of the American economy, led by an American entrepreneur and a healthy consumer, certainly exceeded expectations,” said Fraser for analysts. “I talk to general directors, once again I was impressed by the adaptive ability of our private sector.”