Big banks shake off Jamie Dimon’s glum outlook

Jamie Dimon might be the gloomiest of the country’s top financiers. The JPMorgan JPM CEO has warned that resurgent inflation could force higher interest rates; that assets are overvalued; and that credit is a “bad risk.” Wall Street didn’t get the memo. On Tuesday, the largest U.S. bank by assets, along with Citigroup C and Wells Fargo WFC, reported higher-than-expected-profit, as loan growth continued, dealmaking rebounded and traders navigated volatile markets. Investors following the good news as they pushed the KBW Bank Index (.BKX) up roughly 30% in the past year might want to do their own contingency planning.

Excluding one-offs, JPMorgan earned $14.2 billion in the three months ending in June, up over 8% from the same period a year ago. Citi and Wells Fargo saw earnings rise 25% and 12%, respectively. None of that stopped Dimon from sounding his baleful tune. Alongside results, he warned that “significant risks persist, including from tariffs and trade uncertainty, worsening geopolitical conditions, high fiscal deficits and elevated asset prices.”

Dig into the numbers, though, and no one looks to be prepping for outright disaster. Wells Fargo cut its provisions for anticipated bad loans by 19% from a year ago. Now free from regulatory restraints on its growth, it is shifting more assets into its higher-octane trading division. This comes at the cost of dragging down estimated income derived from the gap between interest on loans and deposits this year.

Similarly, assets in Citi’s markets-exposed trading unit rose 27% from a year ago. JPMorgan also removed some of its own guardrails, cutting loan loss provisions even as non-performing loans and other assets, as well as commitments to companies in default on other IOUs, tops $11.4 billion. That’s the highest level since the pandemic’s early days. The bank’s CFO, Jeremy Barnum, said that an adverse economic scenario, which had driven planning earlier in the year, had all but been removed from its outlook.

That may make sense. The U.S. economy continues to enjoy low unemployment, resilient consumer spending and somewhat restrained inflation. Banks sailed through the Federal Reserve’s annual stress test, all deemed to have enough capital to withstand a severe downturn.

Yet the pace of price rises ticked up again in June, while President Trump put severe tariffs back on the table and loan stress lurks under the surface. Shareholders eyeing Wells Fargo’s trade-off between interest income and leaning into trading sent its stock down over 5% on Tuesday morning. It might be a case of listening to what Jamie Dimon says, not what his bank does.

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JPMorgan said on July 15 that it generated $14.2 billion in earnings in the second quarter of 2025, up 8% from the year prior, after adjusting for a one-time tax change and a gain on the sale of its stake in Visa. Citigroup and Wells Fargo also reported second-quarter results, with earnings rising 25% and 12%, respectively, year-over-year.

On July 10, at an event in Ireland, Dimon said that he thought markets were underpricing the risk of higher interest rates.