U. S. Banking giants have forecasted a lower fourth quarter this week as lenders stockpile rainy day funds to prepare for an economic slowdown, clouding the investment banking sector. Four American banking giants JPMorgan Chase and Core, bank of America Corps, Citigroup Inc And Wells Fargo and Core are to report their earnings this Friday. Along with Morgan Stanley and Goldman Sachs, they formed the bench of six biggest lenders in business amassing combined funds of $5.7 billion in reserves to source loans.
The amount doubles of what was set aside last year. The World Bank's latest forecast spun to slow long lasting slowdown hinting at a slowdown perilously close to recession this year. Economists share a common field preserving an economic slowdown or recession.
As the Fed continues to raise interest rates to combat inflation, rising prices and higher borrowing costs continue to curb business spending, banks are bound to see a noticeable plunge in their profits as activity slows.
The six banks are expected to report a 17% drop in net profits in the fourth quarter from earlier this year. The global investment shrunk to $15.3 billion in the fourth quarter, 50% lower than a year earlier.
With economic slowdown underway, banks aimed to curb risks, with consumer business taking the prime focus of these banks. U. S. Small business confidence leads to a six month low in December indicating inflation and market shortages, which are remaining major issue.
