Banks warn tariffs could slow economic growth
Executives highlight consumer and corporate caution amid tariff uncertainty
Banks report record revenue from stock trading
By Nupur Anand, Saeed Azhar and Tatiana Bautzer
NEW YORK, April 11 (Reuters) – Profits at major U.S. banks beat forecasts in the first quarter as stock trading jumped, but executives warned on Friday that sweeping tariffs could fuel risks and weigh on economic growth.
Equity traders at JPMorgan Chase and Morgan Stanley brought in record revenue as markets boomed at the start of the year, while Wells Fargo earned more fees from clients. But industry executives said consumers and corporations were becoming more cautious about U.S. President Donald Trump’s sweeping tariffs, which have roiled markets and could spur inflation and tip the economy into recession.
“Attention is now shifting to the storm clouds of tariff uncertainty,” said Peter Torrente, a banking sector leader at KPMG in the U.S. “The magnifying glass is hovering now over fiscal policy and credit risk. The health of consumers’ finances is being carefully observed, as tariffs could lead to higher prices, impacting their loan repayment capability … Monitoring loan demand from companies will also be an important area to watch.”
While it is too early to understand the full implications of the tariffs, households and businesses were starting to respond to the import levies, executives at the biggest U.S. lenders said.
“You’re starting to see maybe a little bit of pivoting from consumers pre-buying stuff that might be getting more expensive,” Jeremy Barnum, JPMorgan’s chief financial officer, told reporters. Corporate clients are in a wait-and-see mode, because “this level of policy uncertainty is one that makes it hard to plan for the long term.”
Corporations that are set to report their results in the upcoming weeks will probably withdraw their earnings forecasts given the uncertainty, JPMorgan CEO Jamie Dimon told analysts.
The latest warnings add to a chorus of Wall Street executives ringing alarm bells about the potential economic damage from the tariffs, including Dimon, BlackRock CEO Larry Fink and billionaire fund manager Bill Ackman.
Investors hoping for an end to wild market swings were reminded with Thursday’s stock-market plunge that shifting tariff plans remain a threat to earnings and the economy.
Corporate and commercial banking clients “are taking a step back saying, ‘you know, I need to get more clarity, certainty about where things are going,'” Wells Fargo CFO Michael Santomassimo told journalists.
(Reporting by Nupur Anand, Saeed Azhar and Tatiana Bautzer in New York, writing by Lananh Nguyen; editing by Rod Nickel)
