Top banks see US economy as resilient but warn of rising energy costs

The nation’s biggest banks posted another quarter of strong profits, helped by a resilient economy and a flurry of dealmaking for their investment banking units.

But the strong profits were clouded by the banks’ outlook for 2026, as executives warn that high oil prices are starting to negatively impact the consumer and further geopolitical uncertainty could hamper economic growth as the year progresses.

“There is an increasingly complex set of risks,” Jamie Dimon, CEO and chair of JPMorgan Chase & Co., said in a statement, referring to wars, energy prices and trade wars as some of the current risks in the global economy. In response, the bank slightly lowered its full-year profit forecast.

This quarter, it was the investment banks at all of the major banks that drove revenue to Wall Street during the first three months of the year. JPMorgan reported a 30% jump in investment banking fees, while Citigroup reported a 12% rise in advisory fees.

The rise in markets and investment banking fees was not a surprise. Markets have been intensely volatile in the first three months of the year, and those swings of volatility are great for the professional trading desks stationed at all the major banks. Further, many companies are pursuing mergers, acquisitions or going public, which has provided another stream of revenue for Wall Street.

However, bank executives warn that the extreme swings could have downstream impacts to the U.S. economy, particularly energy prices. In a call with reporters, Wells Fargo Chief Financial Officer Mike Santomassimo said the bank was seeing customers spending 30% to 40% more toward gas on their debit cards, while cutting back on discretionary purchases. CEO Charlie Scharf added to those comments in a call with investors, saying higher energy prices were putting pressure on some of its lower income customers.

Read the full story from the Associated Press.