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Your guide to what the American elections mean 2024 for Washington and the world

You have to give them: bankers are good sellers. Despite the world of chaos – in trade, political geography and markets, and many of them are caused by US President Donald Trump – all major Wall Street banks have witnessed their shares strongly over the past two weeks, as investors have ignored a vibrant rise in treasury revenues, raised the prosperous trading profits of banks and bought the line in which the next pink times are located.

They may be right. In the total, made JPMorgan, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup together Almost $ 37 billion of trading revenues In the first quarter of the year. For the first part of that period – it reaches February 19 from the peak of S&P 500 – the upholsqueous stock fees were withdrawn in fees at a feverish pace; Since then, the trade trend has been more fearful, but not less profitable, supports revenue. “The work is working very well,” David Solomon, the head of the bank’s climbing in Goldman Sachs, told analysts, when asked whether this trend had continued at the end of the bank’s quarter until April. Customer [still] Very active. “

Analysts may have reduced some of their overweight recommendations for banks as Wall Street optimism in January that Trump would mean cancellation, tax cuts and a prosperous economy, which disturbed the president that the president was in a stagnation.

But there is still confidence that “volatility and value” will maintain trading revenues until 2025 and lead banking shares, says Petsey Grabsk, Morgan Stanley Bank Analyst.

More importantly, Trump’s anarchist identification communications, the damage to the dollar and stock markets UsuallyPerhaps it has strengthened the chances and urgency of the promised urgency. This is not priced in bank stocks. “The market is the price of what is happening today.” “This is not an appearance market.”

Jimmy Damon, President of JPMorgan, has disrupted a shrewd line, surpassing the regular link between organizational reform and the treasury market that banks in the market industry can protect against severe fluctuations. Remember, [deregulation] It is not a relief for banks, it is comfortable for the markets. ” He said He also presented the results of the first quarter. It can also make it more attractive to banks to enhance the customization of their investment for the cabinet.

So what kind of canceling the organizational restrictions that we are talking about? Jay Powell, Federal Reserve Chairman, Jay Powell, said at the February Conference Committee meeting “Time” To fix the so -called supplementary financial leverage. This can include stripping the cabinet of the total number of SLR, or reducing the minimum level. Analysts believe that such a change may enter into force before the end of the year.

This may help some banks, although a real difference, there should be a solution to “deep defects” of capital and liquidity requirements and other stress test as well. Meanwhile, Suleiman expressed his confidence that the reform based on a petition is coming, not only on SLR. “I think there is room for the materials that revolve around the capital,” He said to analysts Last week. “The messages I get to leave me optimistic that there will be progress.”

Dimon and Solomon are not random sounds on this topic. Trump was affected both when he agreed He stopped the “mutual” customs tariffs on the world on April 9 (Sure 48 hours before the annual Damon A message to the shareholders He has warned of the dangers of inflation and stagnation. and Goldman had expected 45 per cent of stagnation.)

The Federal Reserve is a decisive channel to cancel the restrictions. While Powell maintained a strong line on the sanctity of an independent monetary policy, it seems more absorbed in the bank’s rules. In addition to his enthusiasm to repair SLR, Powell He said last week This (last) mitigates the so-called God III-American implementation of the latest global rules book on capital-will be ready “soon”. Michelle Bowman, Trump’s touch candidate as deputy head of the Federal Reserve for Supervision, He was appointed to approve it In the coming weeks.

The benign analysis of all this is that American banks will be liberated to support the economy and markets and compensate for sabotage in the short term. But there is also a more warning reading: Reducing rules For regional banks during the reign of Randy Corles, the appointed in Trump MK1 as a chairman of the Federal Reserve Supervision was a major factor in the 2023 regional bank crisis. The pendulum swing from safe from safe to recklessness is in the interest of anyone.

Patrick.jnkins@ft.com