NII was solid at JPM and MS. Jpm stated this was peak NII and gave some hints at what to expect next year. NII does poorly when yield curves are flat or inverted. Right now their is a little bit of steepness to fed fund rate but effective next fomc it will be flat.
What I worry about most is the amount of treasuries and mortgages that they hold. Treasuries already have fallen 20%+ from peak. Homes get risky when prices fall more than down payments. MS had some issues with investments this quarter.
Jpm also upped its credit loss around 1.5B. Saying 5B plus to come over a few quarters with a 6% unemployment base case.
Also interesting, today's Michigan consumer sentiment points to deanchoring inflation expectations. The fed expressed in meeting minutes they are very worried about this happening and I'd expect them to respond aggressively. http://www.sca.isr.umich.edu/
NII was solid at JPM and MS. Jpm stated this was peak NII and gave some hints at what to expect next year. NII does poorly when yield curves are flat or inverted. Right now their is a little bit of steepness to fed fund rate but effective next fomc it will be flat.
What I worry about most is the amount of treasuries and mortgages that they hold. Treasuries already have fallen 20%+ from peak. Homes get risky when prices fall more than down payments. MS had some issues with investments this quarter.
Jpm also upped its credit loss around 1.5B. Saying 5B plus to come over a few quarters with a 6% unemployment base case.
Also interesting, today's Michigan consumer sentiment points to deanchoring inflation expectations. The fed expressed in meeting minutes they are very worried about this happening and I'd expect them to respond aggressively. http://www.sca.isr.umich.edu/