Overview
- JPMorgan executive Marianne Lake said the bank sees broad consumer resilience but a small and increasing group whose wage gains are not keeping up with inflation.
- Lake told investors that lower-income customers used about 20% to 25% of extra tax-refund cash to cover higher gas and energy costs, reducing their financial cushions.
- Banks report strong demand for loans and cards even as higher gasoline prices have pushed up essential spending and credit-card activity.
- The bank warned that if energy-driven inflation stays higher for longer, wages may fail to catch up and that could weaken spending and raise loan losses.
- Lake made the remarks at the Morgan Stanley U.S. Financials Conference on June 9, a development that follows April's jump in inflation tied to higher energy prices from the Iran conflict.