JPMorgan and Citi Aren’t Feeling the Affordability Crisis

(Bloomberg Opinion) — If Americans are caught in an economic crisis, their biggest banks aren’t seeing it. Consumer spending is rising, people are saving and investing, and losses from problematic credit cards are falling. Combined with the weak sentiment reported in the surveys and intense complaints about high prices, this seems like a puzzle, but the 2026 economic outlook looks strong, at least in the eyes of lenders.

Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and that was Wells Fargo & Co.’s message on fourth-quarter earnings this week. Executives at each noted that households and small businesses remained resilient. Everyone is watching the deterioration, but they don’t see it.

JPMorgan CEO Jamie Dimon said Tuesday that the next six to 12 months look very positive. “The consumer has money,” he said. “There’s still employment, even though it’s weakened a little bit. There’s a lot of stimulus coming from The One Big Beautiful Bill.”

Alastair Borthwick, Bank of America’s chief financial officer, added on Wednesday that consumers are “doing very well.” The savings rate across the economy has begun to fall, but Borthwick sees no signs of people borrowing more and saving less to get by. By the end of 2025, investment assets held by BofA’s retail clients increased 16% to nearly $600 billion, supported by inflows of $19 billion for the full year.

“Consumers are still spending more, and that’s consistent with a growing economy,” Borthwick added. That view was supported by November retail sales data released Wednesday, which showed the strongest growth since July, driven by a rebound in car purchases and holiday shopping.

From a third perspective, Wells Fargo CEO Charlie Scharf spoke in terms of alternative, early indicators the bank is tracking to detect growing problems. “We’re looking at things like checking accounts, direct deposit amounts, overdrafts and payment outflows where unemployment is flowing, and we haven’t seen meaningful changes in trends,” he said.

So what’s going on? There are undoubtedly pockets where affordability is a widespread issue, such as housing and healthcare. In other areas, such as food and petrol, the effects of past inflation mean prices remain much higher than before the Covid outbreak. This has a lasting impact on how people feel about their spending.

At the same time, the lowest earners, many of whom are not served by the largest banks, are under real pressure. Nationwide, the share of borrowers more than 90 days behind on repaying credit card debt rose from less than 8% at the end of 2022 to more than 12% at the end of last year, according to the Federal Reserve Bank of New York’s Consumer Credit Panel. There were also delays in vehicle loans.

But this doesn’t translate into real pain for the big banks. While credit card late payment rates haven’t gotten any worse for them, actual losses from bad debts have fallen relative to total balances for these lenders in 2025.

Capital One Financial Corp., which has yet to report fourth-quarter numbers. Even at specialty card companies such as Microsoft and Synchrony Financial, net charge-off rates are projected to increase only slightly and remain significantly below end-2024 levels.

President Donald Trump has focused on large companies owning rental homes and high interest rates on credit cards as seemingly popular ways to ease complaints about affordability. Most major banks were strongly opposed to the second idea. Of course, this is partly because it would seriously hurt their profits, but the industry is also likely to cut lending, especially to the riskiest borrowers.

“This would limit credit to those who need it most and have a detrimental impact on the economy,” said Citigroup CFO Mark Mason.

JPMorgan has been extremely outspoken about the potential policy, though speculative and ill-defined, and said banks would consider all options to combat it, including lawsuits.

We may see more signs of consumer pressure when smaller U.S. banks start reporting later this month, but it’s unlikely to be deep with unemployment still under control. Although affordability is a real crisis for some and persistent sticker shock a problem for others, American spending for banks looks set to continue driving the economy and their profits forward.