Are we cooked? Cracks Begin to Appear at the Nation’s Biggest Banks

Economists are talking about a K shaped economy where the haves are thriving and the have nots are getting worse.

Is our economic growth pattern sustainable?
Or are we heading for Great Recession II: AI Spending Boogaloo

https://www.nytimes.com/2026/01/15/...e_code=1.ElA.ujzL.xvWqtU8cetAx&smid=url-share

Cracks Begin to Appear at the Nation’s Biggest Banks
This week, Bank of America, Citi, JPMorgan and Wells Fargo released fraught earnings reports as President Trump’s threatened cap on credit card rates loomed large.


For a year, Wall Street’s dominant theme has been the so-called K-shaped economy, in which the well-to-do have powered financial activity despite lower earners’ struggles.

This week, the nation’s largest banks reported a broadly disappointing set of quarterly earnings, marking the first stumble after a yearlong spree of rising markets and softening regulations paid off handsomely for the finance set.

Results at Bank of America, Citi, JPMorgan Chase and Wells Fargo all fell short of expectations and their shares fell. Troubles ranged from delayed merger deals (JPMorgan) to stubborn expenses (Citi) to questions about the efficacy of artificial intelligence tools (Bank of America). Banks that do business largely with rich individuals and corporations, such as Goldman Sachs and Morgan Stanley, fared comparatively better.

Results from major lenders are closely watched because they contain hints about the state of the economy and ordinary American consumers.


Wells Fargo’s chief executive, Charles Scharf, said his organization had not seen a “meaningful” shift among the customer data it collects, including checking account flows, direct deposit amounts, overdraft activity and payments. Another Wells Fargo executive described “very consistent activity.”

Wells Fargo’s quarterly results disappointed for a different reason: Lower-than-expected profits, in part because mortgage lending stayed weak in a slow housing market. The bank’s stock saw its steepest fall in six months.