Why America’s biggest banks are still thriving—even amid trade tensions

NEW YORK, NEW YORK - MAY 26: People pass the JPMorgan Chase headquarters building on May 26, 2023 in New York City.

America’s biggest banks are sending a clear signal: the US economy remains resilient in the face of rising global trade tensions and inflation concerns. In second-quarter results released Tuesday, JPMorgan Chase, Citigroup, and Wells Fargo all reported better-than-expected profits and revenues, highlighting the continued strength of US businesses and consumers. JPMorgan’s chief executive Jamie Dimon noted that the economy appears to have landed in a “soft landing” zone, with key indicators showing improvement, the Wall Street Journal reported.

Wall Street gains from tariff turbulence

Despite a year-on-year drop in JPMorgan’s headline revenue and profit—distorted by a one-time gain last year—the bank’s underlying business performance was robust. Its net interest income, a core measure of profitability from lending, rose 2% to $23.3 billion. Both JPMorgan and Citigroup reported gains in trading and investment banking, boosted by early-quarter market volatility following the Trump administration’s announcement of “Liberation Day” tariffs. With the tariffs later paused, calmer markets allowed for a surge in deal-making and corporate borrowing.

Consumers continue to spend—cautiously

The strength of American consumers was also evident. JPMorgan saw credit card spending rise 7%, while Citigroup’s branded cards posted a 4% increase. Outstanding balances rose, lifting banks’ interest income. Yet executives downplayed concerns about rising delinquencies or credit risk. “The consumer basically seems to be fine,” said JPMorgan CFO Jeremy Barnum. Still, the impact of inflation is creeping in, with the Labor Department reporting a 2.7% annual increase in consumer prices for June.

Banks revise recession warnings—but risks persist

Earlier this year, JPMorgan economists had predicted a recession as tariff threats escalated. That call has now been reversed, with Dimon acknowledging that recent tax cuts and tariff delays have helped stabilize the outlook. Citigroup CFO Mark Mason also pointed to the strength of US capital markets and the private sector. However, looming risks remain, with new tariffs on EU and Mexican goods and potential inflation spikes. Wells Fargo CEO Charlie Scharf noted that while business clients are hopeful for a good trade resolution, many are bracing for downside scenarios.

Investors watch inflation, Fed’s next move

The new tariffs could add 0.4 percentage points to inflation, JPMorgan estimates, complicating the Federal Reserve’s ability to cut interest rates. Economists at Goldman Sachs say US consumers will bear roughly 70% of the tariffs’ costs, a burden that could weigh on spending in the months ahead. For now, though, the mood in corporate America appears cautiously optimistic.

“We should recognize there is risk to the downside,” Scharf warned, “as the markets seem to have priced in successful outcomes.” Still, as Dimon said, “It’s good to hope for the best."