JPMorgan Chase: US economy strong, but risks

JPMorgan Chase: US economy strong, but risks

Photo: ANP

The US economy is in good shape, but there are risks. Jamie Dimon, chief executive of JPMorgan Chase, a major US bank, said in a presentation of second-quarter figures. Among other things, he pointed to persistently high core inflation and geopolitical uncertainties caused by the war in Ukraine. According to Dimon, consumers are slowly using up their financial buffers as a result of increased prices.

On the other hand, job growth in the U.S. remains strong and consumer spending continues, albeit at a slower rate than before, Dimon said. The CEO of America’s largest bank did not use the word ‘recession’ in the description. There were fears in financial markets that the US economy could slide into recession as a result of the Federal Reserve raising interest rates to combat high inflation.

JPMorgan Chase’s net profit rose 67 percent year over year to $14.5 billion in the quarter. This was due to the increase in interest rates, which resulted in higher interest income from lending to the bank. It also benefited from its takeover of a majority stake in collapsed regional bank First Republic in May this year. Earnings were under pressure due to trading in stocks and bonds.

Industry colleague Wells Fargo also came up with statistics. There too, higher interest income boosted profits. Net income rose to $4.9 billion from $3.1 billion a year earlier. Chief Executive Charlie Scharf said the U.S. economy has performed better than many expected, but there may be some moderation and uncertainty remains.

Citigroup profit fell 36 percent to $2.9 billion. According to the bank, this is partly due to higher costs. Also, less revenue was generated from investment banking, including, for example, advising on mergers and acquisitions. Top lady Jane Fraser spoke of a challenging macroeconomic climate.

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