Big banks’ second-quarter earnings come with caveats
By Amanda Peacher
Second-quarter earnings are trickling in this week from some of the giants of the sector: JPMorgan Chase, Goldman Sachs, Citigroup and Bank of America among them. A lot of economists feared the worst for banks during the pandemic — fears that now seem to be largely behind them. When a bank decides it’s OK to let those reserve funds loose, that can improve its results. “They can put that money back to work for investors or in the economy,” said Karen Petrou, managing partner of Federal Financial Analytics. But it’s not all rosy for big banks right now, Petrou added. “This is where ultra low interest rates not just hurt bank earnings, they really hurt the ability of most American households to save, which is the most important way Americans protect themselves against the future,” she said — if interest rates are lower than inflation, people’s savings are not worth as much.

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