Published by Global Banking & Finance Review®
Posted on April 11, 2025
5 min readLast updated: January 24, 2026
Add as preferred source on GoogleUS banks see profit rise, but executives warn tariffs may hinder economic growth. Investment banking thrives despite market volatility.
By Nupur Anand, Saeed Azhar and Tatiana Bautzer
NEW YORK (Reuters) - Executives at big U.S. banks warned on Friday of economic turbulence from tariffs that could weigh on economic growth, even as their profits beat forecasts in the first quarter.
Industry executives said consumers and corporations were becoming more cautious about U.S. President Donald Trump's sweeping tariffs, which have roiled markets, could spur inflation and may tip the economy into recession.
"The first quarter was a pretty good start to the year in terms of trading and even business activity, but what happens in the second quarter is still unknown, including the impact on markets, mergers and acquisitions," said Brian Mulberry, portfolio manager at Zacks Investment Management. "It is going to be a tale of two different quarters."
While it is too early to understand the full implications of the tariffs, households and businesses were starting to respond to the import levies, executives at the biggest U.S. lenders said.
"You're starting to see maybe a little bit of pivoting from consumers pre-buying stuff that might be getting more expensive," Jeremy Barnum, JPMorgan's chief financial officer, told reporters. Corporate clients are in a wait-and-see mode, because "this level of policy uncertainty is one that makes it hard to plan for the long term."
Equity traders at JPMorgan Chase and Morgan Stanley brought in record revenue as markets boomed early in the year, while Wells Fargo earned more fees from clients. Shares of JPMorgan rose about 3%, Morgan Stanley climbed 0.3% and Wells Fargo fell 2% in afternoon trading.
Corporations that are set to report their results in the upcoming weeks will probably withdraw their earnings forecasts given the uncertainty, JPMorgan CEO Jamie Dimon told analysts.
The latest warnings add to a chorus of Wall Street executives ringing alarm bells about the potential economic damage from the tariffs, including Dimon, BlackRock CEO Larry Fink and billionaire fund manager Bill Ackman.
"I don't usually pay that much attention to anecdotes, but this time I am," Dimon told analysts, referring to IPOs and deals that had already been withdrawn because of economic uncertainty.
Investors hoping for an end to wild market swings were reminded with Thursday's stock-market plunge that shifting tariff plans remain a threat to earnings and the economy.
Corporate and commercial banking clients "are taking a step back saying, 'you know, I need to get more clarity, certainty about where things are going,'" Wells Fargo CFO Michael Santomassimo told journalists.
Wells Fargo shares extended losses after the CFO said net interest income - the difference between what the bank earns on loans and pays on deposits - would be in the low end of its guidance this year as markets become more volatile.
"If we still have uncertainty in the summer, and I presume we will, you'll see further reserve building by these banks," said Chris Marinac, director of research at Janney Montgomery Scott. "This environment is a little bit easier ... than we had in COVID. You just have a pending trade war, certainly a recession that feels like it's right around the corner, and banks have to address for incremental risk."
Morgan Stanley CEO Ted Pick expressed more optimism than his counterparts, saying the economy could avoid recession, while acknowledging the risks. The bank's deal pipeline remained steady, even though uncertainty had prompted some clients to delay transactions, Chief Financial Officer Sharon Yeshaya said.
Investment banking was a bright spot across Wall Street, with fees at JPMorgan climbing 12%, while revenue rose 8% at Morgan Stanley.
David Wagner, a portfolio manager at Aptus Capital Advisors, said banks could be relatively resilient despite the tariffs.
"Right now, this isn't a financial event that's going to be the genesis of the recession, and banks could be the safe space," he said.
Executives were also quizzed about turmoil in the U.S. Treasuries market, where a searing selloff this week in response to tariffs caused dislocations in the world’s biggest bond market and raised investor concerns about lasting damage to markets.
Dimon urged regulators to make changes to the supplementary leverage ratio, a rule that requires big U.S. banks to keep an extra layer of loss-absorbing capital. If there was a "kerfuffle," or market disruption, the Federal Reserve would probably step in, but that seems unlikely for now, he said.
Elsewhere on Wall Street, BNY profits surpassed expectations as its assets under custody grew. BlackRock, the world's largest asset manager, said its assets surged to a record $11.58 trillion. Still, its CEO said uncertainty and anxiety were dominating markets.
"The emperor has no clothes right now. It's obvious that nobody knows what's coming," said Colin White, CEO and portfolio manager at Verecan Capital Management.
(Reporting by Nupur Anand, Saeed Azhar and Tatiana Bautzer in New York, additional reporting by Nivedita Balu, writing by Lananh Nguyen; editing by Rod Nickel)
The article discusses US bank profits rising amidst concerns over tariffs impacting economic growth.
Executives warn that tariffs could spur inflation and potentially lead to a recession.
Investment banking remains strong, with increased fees and revenue despite economic uncertainty.
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