Here are the takeaways from today’s Morning Brief. Sign up to receive the following in your inbox each morning:
When interest rates are high, the nation’s largest banks win. Under the next president, oversight will be loosened, so it could win even if interest rates fall.
Despite all the signals of trepidation in the market regarding tariffs and other Trump-related inflation concerns, big banks and their record profits released another celebratory document this week, praising huge profits and optimism for the future. The outlook is promising and promises an improvement. The next president’s agenda for policy innovation and pro-growth.
And Wednesday’s blockbuster bank earnings signaled not just a long-awaited desire for a change of government in Washington, but also a continuation of the post-COVID-19 economic recovery.
JPMorgan, the largest bank, recorded higher profits in 2024 than ever before. The company’s full-year profit was $58 billion, the highest in U.S. banking history. Goldman’s full-year profit rose 68% to $14.2 billion, with fourth-quarter profit more than doubling from a year earlier. Wells Fargo also ended the year on a strong note, with quarterly profits of $5.08 billion (compared to $3.45 billion a year earlier).
They fared quite well under Biden, even if bank executives believed the Trump White House would be more forgiving. But they also believe they are on the cusp of something bigger.
Even Trump’s allies have expressed concerns about how his tariff threats and immigration reform pledges will lead to the economy, especially inflation, but his second round of deregulation and business-friendly appointments will help banks. It is expected that this will be a benefit.
“Companies are becoming more optimistic about the economy, driven by expectations for more pro-growth policies and improved collaboration between government and business,” JPMorgan Chief Executive Jamie Dimon said Wednesday. Ta.
After a deep freeze, dealmaking is booming again, and the potential for a jackpot is just around the corner. Industry executives hope a light regulatory environment will give the green light to mergers. President Trump is also expected to ease or eliminate a series of proposed capital controls that could weigh on industry profits.
Of course, if President Trump has his way, banks will still have to contend with the effects of increased public spending and tax cuts. But the fight against inflation appears to be making progress, at least for now. Wednesday’s encouraging reading suggested the Fed may be in a good position to not need to pull the rate change lever to see price pressures continue to ease.
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