JPMorgan Chase (NYSE:JPM) provided a forecast for its annual net interest income that surpasses analysts’ predictions, attributing this success to the boost in profits driven by higher interest rates in 2023.
The company projected its net interest income (NII) – the profit made from the difference between interest earned on loans and the interest paid on deposits – to be approximately $90 billion for the fiscal year 2024. This figure exceeds the consensus forecast of $86.08 billion. For 2023, the NII was reported at $97 billion.
JPMorgan anticipates that growth in loans, especially in credit card revolving balances, along with a moderate outflow of deposits, will partially mitigate the effects of six anticipated interest rate cuts by the Federal Reserve throughout the year. This was outlined in a presentation by the company.
Chairman Jamie Dimon commented on the state of the American economy, calling it “resilient.” He noted, however, that the economy’s current strength is largely fueled by significant government deficit spending and previous stimulus initiatives. Dimon also highlighted the ongoing need for increased expenditure in areas like the green economy, restructuring global supply chains, military spending, and rising healthcare costs. He warned that these factors might cause inflation to persist and interest rates to remain higher than what the market currently anticipates.