JPMorgan Chase reported strong fourth-quarter results on Friday, including a $10.4 billion profit that beat forecast. Still, JPMorgan Chase’s profits fell 14% from the same quarter a year earlier as trading revenue fell.
“The economy continues to do well despite headwinds from the Omicron variant, inflation and supply chain bottlenecks,” Dimon said in a statement. “Credit continues to be healthy…and we remain optimistic about U.S. economic growth as the business climate is upbeat and consumers benefit from job and wage growth.”
JPMorgan Chase and other big banks are benefiting from rising interest rates, making their loans more profitable – and from an economy that has rebounded from the depths of the credit slump. Commercial lending rates have risen in anticipation of Fed rate hikes this year.
JPMorgan Chase also saw strong increases in advisory fees thanks to a booming environment for merger activity as well as strong IPO demand. JPMorgan Chase said global investment banking fees were up 37% from a year ago.
But rising interest rates could slow the recovery. The Federal Reserve has hinted that it will raise rates three or even four times this year.
Dimon said in response to a question from CNN’s Matt Egan that the Fed needs to “thread the needle” to ensure it can keep inflation under control and not slow the economy too much.
Still, Dimon added in a follow-up question to CNN Business that the economy is in much better shape now than it was in March 2020 and that we should “count our blessings” on that.
Dimon said he wasn’t going to spend too much time worrying about what the Fed would do and when because it would be a “waste of time to do so.”
However, Dimon sang a slightly different tune during a conference call with analysts later Friday morning, saying he thought there was a “very good chance of more than four” rate hikes. this year – and potentially as many as six or seven.
“This whole notion that somehow it’s going to be sweet and sweet and nobody’s ever going to be surprised…I think that’s a mistake,” Dimon said of current rate hike expectations. slow, progressive and telegraphed.
Wells Fargo exceeds forecasts
Rival Wells Fargo also reported strong results on Friday. Earnings and revenue beat analysts’ expectations. The bank has taken steps to repair its public image after a series of deadly scandals that damaged its reputation and made it the target of increased scrutiny and regulation in Washington.
“The changes we’ve made to the business and the continued strong economic growth outlook give us comfort in our positioning heading into 2022,” Wells Fargo CEO Charlie Scharf said in a statement. “But we also remain mindful that we still have a multi-year effort to meet our regulatory requirements – with setbacks likely to continue along the way – and we continue our work to put exposures related to our historical practices behind us.”