JPMorgan Chase reported strong fourth-quarter results on Friday, including earnings of $10.4 billion that beat expectations. However, JPMorgan Chase earnings were down 14% compared to the same quarter a year earlier, as trading returns declined.
“The economy continues to do well despite headwinds related to the Omicron variable, inflation and supply chain bottlenecks,” Dimon said in a statement. “Credit continues to improve…and we remain optimistic about US economic growth as business sentiment is upbeat and consumers benefit from job and wage growth.”
JPMorgan Chase and other big banks are benefiting from higher interest rates, making their loans more profitable — and an economy that has bounced back from the depths of the credit slump. Commercial lending rates have risen in anticipation of the Fed’s rate hike this year.
JPMorgan Chase also posted strong increases in advisory fees thanks to a buoyant environment for merger activity as well as strong demand for initial public offerings. JPMorgan Chase said global investment banking fees are up 37% from last year.
But higher interest rates could slow the recovery. The Federal Reserve has hinted that it will raise interest rates three or even four times this year.
Asked by CNN’s Matt Egan, Dimon said the Fed should “check” to make sure it can keep inflation in check and not slow down the economy too much.
However, Dimon added in a follow-up question from CNN Business that the economy is in much better shape now than it was in March 2020 and that we should “rely on our blessings” on that.
Dimon said he wouldn’t spend much time worrying about what the Fed would do and when because it would be “a waste of time to do it.”
Wells Fargo tops expectations
Rival Wells Fargo also reported strong results on Friday. Profits and revenue exceeded analyst expectations. The bank is taking steps to repair its public image after a series of painful scandals that have damaged its reputation and made it the target of more scrutiny and regulation in Washington.
“The changes we’ve made to the company and continued strong economic growth prospects make us feel good about our position in 2022,” Charlie Scharf, CEO of Wells Fargo, said in a statement. “But we also remain aware that we still have a multi-year effort to meet our regulatory requirements – with the potential for setbacks to continue along the way – and continue our work to put exposures related to our historical practices behind us.”