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

Almost everywhere you see in the world of finance, things are surprisingly running well – at least for now.

Wall street is Tuberculosis Thanks to the bounce in stock and bond trading and a pickup in corporations, for receiving the contestants and taking a large -scale loan. At the same time, Main Street is catching that the American consumer continues to spend, borrow and repay the American consumer, according to reports from the largest American banks of this week.

This creates an unusually profitable environment for financial firms. The six largest American banks produced about $ 39 billion at the benefit of the second quarter, removing the expectations of analysts and collectively jumped more than 20% from the core earning a year ago.

This is a notable result after a start for the quarter. Period started Shock And the President declines in markets on 2 April Donald Trump’s “Liberation Day” tariff widely. JPMorgan Chase Economists said at that time that policies would probably cause recession this year.

But Trump returned to the markets after replying Crisis Coming from American bonds and most traded tariffs were delayed on most trading partners. Investors have started Unheard Tariff pronunciation of the barrage of the administration in the form of blaster or noise, and the corporate leaders are moving beyond the sideline to pull the multibibilian-dollar transactions, showing bank results.

“Look how far the world is in three months,” Wells Fargo Banking analyst Mike Mayo Told CNBC. “Throughout the quarter, you had a pickup in investment banking, debt growth and optimism with economic landscapes. Here we are much more absent with a recession.”

This dynamic JP Morgan was clear in the largest and most profitable American bank. It produced about $ 15 billion Quarterly benefitsWhich is almost the same with the next three largest banks.

Trading benefited from disturbed conditions in the quarter as Trump rolled the markets with a fast -developed policy statements. But the real surprise came from investment banking, including merger advice, issuing IPO and debt and equity. Revenue increased by 7%in JP Morgan, produced $ 450 million more than analysts, managers have a few weeks later Wags An estimated 15% decline.

“Pickup in investment banking fee, to some extent, to accept people’s uncertainty and decide to move forward with transactions,” JP Morgan CFO Jeremy barnam Told reporters on Tuesday. “The corporate community has admitted that they just need to navigate through it.”

This means that it is less likely that the recession will cause a spike in US unemployment this year, damaging consumers’ ability to repay their loans. This was clear in the bank Provision For credit deficit, which was 14% smaller than the first quarter.

The economy is “square in”soft landing“The scenario, Barnam, told reporters this week.

At the same time, consumers and companies are borrowing more money from JP Morgan, where the debt hike increased by 5% compared to a year ago, increased by credit cards and wholesale loans, the bank said.

Those figures mean, at least now, banks are giving all clear indications to the American economy in the early months of another Trump Presidency. Even at a time marked by unrest and increasing geo -political risks, the economy has rejected expectations for recession.

“Banks are economically sensitive businesses, and therefore how the economy performs under administration matters to their results,” Matt StuckyThe main portfolio manager for equity in Northwestern Mutual Wealth Management. “So far, the economy continues to move forward.”

The situation also made JP Morgan CEO Jamie DimonWho Often he warns about risks, which he sees, Relatively optimistic sound about the economy.

Dimon told reporters this week, “It has become flexible, and expected it will continue.” He said, “It is always good to expect for the best, not best, and we’ll see … one thing that I will indicate, the world is very big and is very diverse”

Trump’s sweeping spending billSigned in the law this month, protect corporate tax rates and expand commercial cuts. Dimon said that at the top, the camping efforts in industries would promote the economy.

Last month, Federal Reserve released Proposal To amend capital that need to keep banks for low -risk assets, potentially release Officials said that they can use billions of dollars for banks to promote reproach, buy contestants or promote more debt growth, officials said this week.

Together, it is difficult for banks to imagine a better setup, which is now, Barnam said.

“We are essentially firing on all cylinders,” Barnam told analysts. “Rates are a good level for us. Deal activity is high. Capital markets are very strong. Consumer credit is excellent. Wholesale credit is excellent.”

To ensure that the emotion may move at a time, and risk, rising American deficit and geo -political upheaval are still out, Barnam said.

Wells Fargo CEO Charlie Sharf, Fresh Off finally removed a federal reserve sentence, which capted his bank’s balance sheet at 2017 level, this week seemed to be an ebulant during an earning call. His company recently gave to all its employees $ 2,000 Bonus to celebrate milestone.

“This is an incredibly interesting and fun time,” Sharaf told analysts on Tuesday. “We are starting to look at the deposit flow, as we have talked. We have got a new account increase. We have received the cost in the check. Credit is doing well … We have fewer obstacles.”

Shares of another former Lagard, City groupThis year about 30% have climbed as CEOs Jane Fraser Explains to investors that his turnaround plan is working.

Fraser looked like a CEO on the attack this week, the bank’s new luxury credit card and plan to issue a seat-brand StabechoinHe also performed a miracle on the flexibility of the American economy.

“The strength of the American economy, operated by the American entrepreneur and a healthy consumer, is definitely more than expectations,” Fraser told analysts. “As I am talking to the CEO, I have yet been impressed by the adaptability of our private sector.”