What The USA’s Largest Bank Thinks About The State Of The Country’s Economy In Q3 2025 : The Good Investors %

Economic Overview - The US economy remained generally resilient in Q3 2025, although job growth softened and uncertainty heightened due to geopolitical conditions, tariffs, trade uncertainty, elevated asset prices, and the risk of sticky inflation [3] - Consumers and small businesses showed resilience, with stable credit delinquencies better than management's expectations, but the labor market's potential deterioration is a risk being monitored [3] Credit Performance - Net charge-offs for JPMorgan rose to US$2.6 billion, influenced by fraud cases, with total credit costs at US$3.4 billion and a net reserve build of US$810 million [4] - The expected credit card net charge-off rate for 2025 has been revised to 3.3%, down from a previous estimate of 3.6%, due to favorable delinquency trends [7] Investment Banking - Investment banking fees increased by 16% year-on-year in Q3 2025, driven by strong equity underwriting and a robust pipeline for capital markets activities [5][6] Consumer Behavior - The current consumer savings rate is lower than previously expected, attributed to robust spending despite lower income levels [8][9] AI and Productivity - Management noted that the AI theme is significantly impacting financial markets, with expectations that AI investments will eventually lead to reduced growth in bank expenses, although measuring this impact is challenging [11][12] Credit Risks in Nonbank Institutions - Management expressed concerns that nonbank financial institutions in the USA face higher credit risks compared to banks, particularly in leveraged lending scenarios [13][14][15]