JPMorgan and Citi Aren’t Feeling the Affordability Crisis

Core Viewpoint - Despite an affordability crisis affecting many Americans, major banks are reporting strong consumer spending and a positive economic outlook for 2026 [1][2]. Group 1: Bank Performance and Consumer Behavior - Fourth-quarter earnings from major banks like Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo indicate that households and small businesses are resilient, with no signs of deterioration in their financial health [2]. - JPMorgan's CEO Jamie Dimon noted that consumers have money and job availability remains, contributing to a positive outlook for the next 6 to 12 months [3]. - Bank of America's CFO Alastair Borthwick reported a 16% increase in invested assets held by retail clients, reaching approximately $600 billion, with $19 billion in inflows over the year [3]. Group 2: Economic Indicators and Consumer Spending - Retail sales data for November showed the strongest growth since July, driven by increased car buying and holiday shopping, supporting the view of a growing economy [4]. - Wells Fargo's CEO Charlie Scharf mentioned that early indicators, such as checking accounts and direct deposit amounts, have not shown significant negative trends [5]. Group 3: Affordability Issues and Credit Trends - While affordability issues exist in sectors like housing and healthcare, the overall sentiment is mixed, with lingering effects of past inflation impacting consumer perceptions [6]. - The Federal Reserve Bank of New York reported that the share of borrowers more than 90 days late on credit card debt rose to over 12% late last year, up from less than 8% at the end of 2022 [7]. - Despite rising delinquencies among lower-income borrowers, major banks are not experiencing increased late payment rates on credit cards, and actual losses on bad debts have decreased as a proportion of total balances [8]. Group 4: Regulatory Concerns and Industry Response - President Trump's focus on high credit card interest rates and corporate ownership of rental homes has prompted pushback from major banks, which argue that such measures could harm profits and restrict credit access [9][10]. - Citigroup's CFO Mark Mason warned that proposed policies could negatively impact credit availability for those who need it most, potentially harming the economy [10]. Group 5: Future Outlook - Smaller U.S. banks reporting later may reveal more consumer strain, but with unemployment contained, significant issues are not anticipated [11]. - Overall, American consumer spending is expected to continue driving economic growth and bank profits [11].