Banks are finding out that inflation, which has helped their stocks, is a double-edged sword

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There is the risk that runaway inflation could actually wipe out the finance industry's gains from higher interest rates, according to JPMorgan's CFO.

are disclosing that hot inflation in one area — employee wages — is casting a shadow over the next few years.that expenses will climb 8% to roughly $77 billion this year, driven by wage inflation and technology investments. Higher expenses will likely push the bank's returns in 2022 and 2023 below recent results and the lender's 17% return-on-capital target, according to CFO Jeremy Barnum.

"On balance, a modest inflation that leads to higher rates is good for us," the CFO told analysts in a conference call. "But under some scenarios, elevated inflationary pressures on expenses could more than offset the rates benefit." "We have seen some pressure in what one has to pay to attract talent," Mason said. "You've even seen it at some of the lower levels, I should say entry levels in the organization."

Dimon said that while overall inflation would "hopefully" start to recede this year as the Fed gets to work, increases in "wages, and housing and oil are not transitory, they'll stay elevated for a while."

 

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I guess it is easy to call people crybabies when you made $62 million during a pandemic.

Finding out? You mean Wall St banks don’t know about inflation? Seriously? Wall St? Are we fools? 😅

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