Expectations Amid Policy Uncertainty

By Saeed Azhar, Nupur Anand, Tatiana Bautzer

NEW YORK (Reuters) – U.S. bank executives expressed on Tuesday an expectation for ongoing policy uncertainty as President Donald Trump’s second administration emerges but maintained optimism regarding the economic outlook.

Since taking office last month, Trump has implemented various executive orders, tariffs, and personnel changes. In the banking sector, he accused major U.S. lenders of closing accounts for conservative customers and dismantled a consumer financial watchdog over the weekend.

Goldman Sachs CEO David Solomon, speaking at a Miami conference, stated that while the administration will pursue a more “growth-oriented agenda,” the ultimate direction of policies remains complicated.

> “The regulatory environment should be a constructive tailwind, but the broad policy landscape is still uncertain,” Solomon said. “A lot of policy is shifting, and until we have more certainty on that policy, it’s going to create some volatility,” referring to immigration, tax, energy, trade, and fiscal policy.

He anticipated that markets would experience beneficial “stops and starts” for Goldman’s trading business, noting that trading on Monday was relatively normal following two weeks of significant activity due to numerous executive orders and sanctions.

Wells Fargo’s finance chief, Mike Santomassimo, shared similar sentiments at the conference, highlighting clients’ optimism about economic prospects and a willingness to consider mergers and other activities.

> “There’s certainly this optimism that the administration is going to be much more pro-growth, pro-business, removing obstacles to economic growth,” he said.

While Santomassimo acknowledged ongoing uncertainty regarding policy trajectories that might make clients cautious about striking deals, he remains hopeful for continued momentum.

JPMorgan Chase reported expectations for increased market activity but noted some businesses are adopting a wait-and-see strategy regarding substantial investments.

> “What we hear from clients is optimism, but a bit of a wait-and-see approach around committing to significant investments,” stated Chief Operating Officer Jennifer Piepszak on Tuesday.

Keycorp CEO Chris Gorman observed that despite the uncertainty related to new import tariffs, clients remain optimistic. A poll conducted among the bank’s clients indicated that 62% expect to engage in strategic mergers and acquisitions in the coming year.