Overseas Network, October 16, According to CBS 14, major banks in Wall Street are increasingly pessimistic about the outlook for the U.S. economic outlook, and many bank executives say they are preparing for a potential downturn or recession.
JPMorgan Chase , Citigroup and six major banks have previously announced quarterly results, mentioning the U.S.'s decades of high inflation, the rapidly slowing real estate market, and Feder hikes interest rates at an unprecedented rate. "We recognize that pressure points are being formed in multiple areas of the U.S. economy, which may lead to pressure in the future," said Andy Cecere, CEO of , the second largest bank in the U.S. Bank of America. Charlie Scharf, CEO of , also told investors that a broader recession is expected to occur, leading to more credit defaults and losses. JPMorgan CEO Jamie Dimon (Jamie Dimon) bluntly stated that he was "seriously" worried that the economy may decline in the next six to nine months.
Inflation casts a long-term shadow on the future prospects of these banks, and most banks are currently strengthening their reserves for loan loss reserves. JPMorgan has set aside about $1 billion in its loan loss reserves, while Citigroup and Wells Fargo have also invested about $400 million in their reserves this quarter. The last time the loan loss reserve was reserved at such a scale was in the early stages of the epidemic. At that time, banks invested tens of billions of dollars in these reserves, but released most of the funds in 2021.
For several months, the U.S. inflation expectations have continued to deteriorate, and in September, the consumer price index rose 8.2% compared with the same period last year. Faced with high inflation, the Fed has hiked aggressive interest rates three times in a row, raising short-term interest rates to the range of 3% to 3.25%, the highest level in 14 years. Outside criticism that the Fed's series of measures may trigger an unnecessary deep recession. (Overseas Network Hou Xingchuan)
Source: Overseas Network
