JPMorgan Chase shares dropped almost 3% on Wednesday after the Federal Reserve’s Open Market Committee decided to keep its key interest rates unchanged, delaying the boost to interest income that higher rates typically provide lenders. The decline was limited because many investors and analysts had expected the decision, though persistent inflation makes future rate hikes likely. Banks generally benefit from a wider spread between loan interest and deposit interest when rates rise, and Chase had recently rallied after passing the Fed’s annual stress tests and posting strong quarterly earnings. The author does not view this as the start of a rout, expecting the bank to continue performing well and to gain when rates eventually increase.
JPMorgan Chase & CoFed holds rates steady, delaying boost to interest income from higher rates.