Worried about K-shaped economy? Big banks say it's not even real and that the US is okay

While consumers continue to be worried about the economy, things are looking good for Wall Street. Amid the K-shaped recovery and a weakening job market, consumer sentiment has slipped to near its lowest levels in 59 years, according to the University of Michigan's survey. But, earlier this week, the nation's largest banks posted healthy profits with their CEOs claiming that the U.S. economy is doing just fine. 

The big trio, Bank of America, Citigroup, and Wells Fargo, which are known for different styles of banking, posted the same results with profits being up, and deals looking healthy. The numbers being up by quite some margin have led to the top executives claiming that consumers are doing fine, despite the concerns. “The U.S. economy is doing just fine. There are downside risks out there, geopolitical risks in particular. But when I step back and look at it holistically, we have an economy that has managed uncertainty and risks in a resilient type fashion,” Mark Mason, Citigroup’s chief financial officer, told reporters, as per Fox News. 

The same sentiment was echoed by Brian Moynihan, CEO and chairman of Bank of America, who stated: “While any number of risks continue, we are bullish on the U.S. economy in 2026.” Furthermore, the bank's Chief Financial Officer, Alastair Borthwick, told reporters that the bank wasn't seeing the K-shaped bifurcation in its data. He claimed that the idea of the rich thriving and the poor being left behind is overexaggerated, saying, “Occasionally, we will show in our earnings materials performance of clients with FICO scores of 660 or lower. That is about 12% of our client base. The shape of that group, over time, looks very similar to the path of the group that is above 660.” Bank of America posted a profit of $7.6 billion and $28.4 billion in revenue. It further reported an 6% increase in credit and debit card spending, and credit card balances increased by a modest 3% year-over-year, as per Fox.

CEO of JPMorgan Chase, Jamie Dimon, who previously warned that a “hurricane” was set to hit the U.S. economy, looked to backtrack, making similar comments as Moynihan. “But I think when you’re guessing what the macro environment is going to be, if you ask me, in the short run, call it six months and nine months and even a year, it’s pretty positive,” Dimon said in the bank's earnings call, according to a transcript by FactSet. Consumers have money. There are still jobs, even though it’s weakened a little bit,” Dimon said, adding that the stimulus from the One Big Beautiful Bill Act was going to further boost economic activity. 

Until last weekend, the big banks considered the White House and President Donald Trump an ally, until he announced his plans to impose a 10% cap on credit card interest rates. For the banks that have a large profitable credit card business, the interest rate cap comes as an impossible move. “Affordability is a big issue, and we look forward to collaborating with the administration on ways we can address this. But an interest rate cap is not something we could or would support. It would restrict credit to those who need it the most and have a delirious impact on the economy," Mason said. 

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