Banks are thriving so far in Trump’s economy. Here’s what that means

Almost everywhere you look at the world of finance, things are going surprisingly good – at least for now.

The Wall Street is muttered through a pickup in companies that buy an explosion in stock and bond trade and receiving large loans. At the same time, Main Street continues to spend credit, borrow and repay the American consumer, according to reports from the largest US banks this week.

It provides an unusual profitable environment for financial companies. The six largest US banks won about $ 39 billion in the second quarter profit, leaving the expectations of the analysts behind, and a year ago, they jumped more than 20% of basic gains.

It is a remarkable result after a quarter turbulent start. The period began on April 2 with shock and immersion markets according to President Donald Trump’s sweeping “Liberation Day” tariffs. JPMorgan Chase Economists said policies would probably cause stagnation this year.

However, the markets returned after responding to the signs of distress from US bonds and delayed the most punishing tariffs in most trading partners. Investors have begun to set the management tariff declarations threshold to blush or noise, and corporate leaders come out to make multibillion dollars transactions.

“Look how far the world goes in three months,” Wells Fargo Banking Analyst Mike Mayo told CNBC. “During the quarter, you have a turntable in the field of investment banking, credit growth and optimism with economic scenarios. Here we are talking about stagnation immediately.”

This dynamic largest and most profitable US bank was open in JPMorgan. It produced about $ 15 billion in the three -month snow, as much as the almost three banks came together.

Trump, with rapidly developing policy statements, wandered the markets in the quarter of turbulent conditions. However, the real surprise came from investment banking, which includes public offering, public offering, debt and self -export. The revenue in JPMorgan increased by 7% and produced $ 450 million more than the analysts expected only weeks after warning about a decrease of approximately 15%.

JPMorgan CFO, “Investment banking fees to some extent, reflect people who accept uncertainty and decide to continue the transactions.” Jeremy Barnum He told journalists on Tuesday. “The corporate community acknowledged that they should only walk around.”

This means that a stagnation will lead to an increase in the unemployment of the US this year and that consumers will damage their ability to repay their debts. This was open at the bank opposite For credit losses, 14% smaller than the first quarter.

Barnum told journalists this week, the economy, “soft landing” scenario, he said.

At the same time, consumers and companies borrow more money than JPMorgan, where loan growth increased by one year ago, and fueled by increasing credit cards and wholesale loans.

These statistics mean that at least for now, banks give a very clear signal about the US economy in the first months of the second Trump Presidency. Even at a time marked with turbulence and increasing geopolitical risks, the economy challenged the expectations of a decline.

“Banks are economically sensitive businesses and it is important for the results of how the economy performances under management,” he said Matt StuckyNorthwestern is the chief portfolio manager of stocks in Mutual Asset Management. “So far the economy continues to progress.”

The situation even made JPMorgan CEO Jamie Dimon, who frequently warns the risks he sees, is relatively optimistic about the economy.

Last month, a federal reserve offer Potentially to change the capital that banks need to keep for low -risk assets release Managers can use billions of dollars for banks that they can use to increase their purchase of share, buy competitors or fuel more credit growth this week.

When Barnum is handled together, it is difficult to design a better installation for banks than now.

“Actually, we’re shooting all the cylinders,” Barnum said to the analysts. “The odds are a good level for us. Agreement activity is high. Capital markets are very strong. Consumer loan is excellent. Wholesale loan is excellent.”

To be sure, the sensitivity may vary on a penny, and the risks such as inflation, US deficit and assembly of geopolitical turmoil are still out.

Even the old delays of the banking industry show signs of revival.

Wells Fargo CEO Charlie Scharf, finally lifting the yoke of a federal reserve penalty that closed the bank’s balance sheet at the 2017 levels, was coming to Ebulistic this week during a call for earnings. The company to all its employees $ 2,000 Bonus to celebrate the milestone.

“This is an incredibly interesting and fun time, Schar Scharf said to Tuesday analysts. “As we talked, we start to see deposit flows. We have a new account growth. We have control costs. The loan is performing well … We have less restriction.”

Shares of another old delay, CitigroupCEO Jane Fraser investors convinced the return plan to work for approximately 30% this year.

Fraser came like a CEO in the attack this week, announced the bank’s new luxury credit card, and plans to publish a Citi -branded Stablecoin. He also admired the flexibility of the US economy.

“The power of the US economy, directed by an American entrepreneur and a healthy consumer, is absolutely exceeded,” Fraser analysts. ” He said. “When I was talking to the CEOs, I was still impressed by the adaptability of our private sector.”