Markets reacted sharply when President Donald Trump announced his tariff plan on April 2, leaving bank executives at JPMorgan Chase, Wells Fargo and others unsure as to what the future holds for their institutions.
The April 9 announcement of a
In his original
Even leaders with
Robin Vince, BNY chief executive, told reporters on a call this month that tariff negotiations "are going to take some time" and market unpredictability "will likely have some length to it."
"There's clearly been some signs of optimism at the beginning of the year, but we've now seen a reversal of sentiment, which has been driven by uncertainty," Vince said. "So we now have quite a few things on the minds of market participants."
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Mergers and acquisitions appetites across the banking industry have also fallen prey to tariff woes.
Trump's reelection signaled the beginning of an age of promised deregulation, which banks took as a sign that, when combined with a favorable economy, would spur M&A deal activity. Those who were once optimistic about consolidation volumes have since adopted a sobered view on things.
Deals in times like these aren't impossible, but questions around inflation and trade policy typically can lead to pauses, Brian Foran, managing director at Truist Securities, told American Banker.
"These kinds of wild swings and interest rates are a little tricky," Foran said. "If you're pricing a deal, and one of the key inputs is interest rates … it just makes it tough to get your arms around what you're buying."
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Learn about how Trump's tariffs are complicating cross-border payments, stalling bank M&A activity, hampering municipal bond markets and more.
Trump's tariff plays are muddying cross-border payments
The true impact of tariffs on consumer spending has yet to be realized following the 90-day pause. That hasn't stopped companies managing international cash flow from looking closely at their own cash positions.
In a simplistic view, taxes on imported goods tend to dissuade consumers from purchasing them and opt for items produced domestically or exported by another trade partner of the U.S., thereby strengthening the U.S. dollar. But Ernie Tedeschi, director of economics at the Budget Lab at Yale, told American Banker that those benefits are quickly reduced when foreign countries issue tariffs of their own.
"Where this leaves currency traders and cross-border payments and people in finance is a lot of uncertainty about what the right way to trade is," Tedeschi said. "A lot of what we're seeing in markets now is really not a shock from the substance of the policy. … It is just the uncertainty of the policy."
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Bank M&A pulse flatlines in wake of tariff pivots
Banking executives were optimistic about the economy following Trump's return to the White House in November, as he entered the White House with promises of deregulation and other pro-economic messaging. Between the ebb and flow of the stock markets and trade policy shifts, hopes for strong mergers and acquisitions performance have been dashed.Leaders like JPMorgan Chase President and CEO Jamie Dimon and Dan Rollins, CEO of Cadence Bank in Texas and Mississippi, expressed similar downcast sentiments about the impact of tariffs on bankers' appetites for M&A deals, with Dimon saying in his
Cadence Bank
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Credit conditions are a top focus for Federal Reserve Bank of Chicago leader
Federal Reserve Bank of Chicago President Austan Goolsbee told reporters during an Economic Club of New York event this month that credit markets are a North Star of his to sort out the true status of credit conditions.
"Direct lending credit has remained moderately restrictive and kind of tight, and most of the credit measures that go through the market, like junk bond spreads and others, have been very narrow," Goolsbee said. "So, we've had a schizophrenic view of what our credit conditions are like. Are they restrictive, or are they loose?"
The disparate views are owed in part to the wild stock market swings in the wake of Trump's tariff moves, Goolsbee said, but should improve following the
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How will the taxing effect of tariffs affect DeFi?
Sergey Nazarov, co-founder of Chainlink and CEO of Chainlink Labs, is predicting that decentralized finance will only grow in importance as trends of deglobalization and trade strife continue to worsen.
Nazarov told American Banker prior to Trump's
A globalized market means "you have access to global liquidity or the purchasing power of everyone globally," Nazarov said. "At the end of the day, the few things that are still globalized in nature will be very big."
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'The economy is very solid': Bessent defends tariff policies
For Treasury Secretary Scott Bessent, strong results from the March
"There is a little uncertainty, but in general, the companies I've spoken to, people who have come, the CEOs who have come into Treasury, tell me that the economy is very solid. We got very good jobs numbers [this month], so I think that we are in pretty good shape," Bessent said at the American Bankers Association Washington Summit on April 9. "I think we have about 70 negotiations lined up, I'm not planning on going anywhere for Easter."
Countries that have implemented tariffs on U.S. goods in response to U.S. taxes include Canada's 25% tariff on specific vehicle imports and the European Union's proposed 25% tariffs on a wide swath of products made in the U.S.
