Uncertainty Looms: Federal Reserve’s 2025 Moves Hang in the Balance
As the Trump administration takes office, investors are bracing for impact. With tariffs on China and the European Union looming, the Federal Reserve’s next moves are far from certain. According to BNY CEO Robin Vince, “anything is possible” in 2025, and being prepared is key.
Tariff Threats Send Ripples Through Markets
On his first day in office, Trump wasted no time stoking tariff concerns, threatening 25% tariffs on Canada and Mexico, and potentially as high as 100% on China. Despite this uncertainty, bank stocks have seen a post-election surge, with the KBW Nasdaq Bank Index up 8% since Trump’s win.
Deregulation and Deal Activity Fuel Optimism
Under the Trump administration, the Consumer Financial Protection Bureau’s authority is expected to be rolled back, freeing up banks to operate more freely. Deal activity is also expected to pick up, fueling the lucrative M&A departments of big banks and supporting broader market valuations and trading businesses.
Banks’ Resilience Put to the Test
BNY CEO Robin Vince believes that banks have added significant capital and liquidity over the past 15 years, making the system stronger. He argues that it’s time for banks to use this strength to help grow and support clients and individuals.
Analysts Weigh In: Deregulation and Growth Ahead
Morgan Stanley analyst Betsy Graseck sees scope for deregulation under Trump, which could reinvigorate retail trading and private markets access into the retirement channel. Her top picks for financials include Citi, Barclays, and Robinhood.
Fourth Quarter Results: A Mixed Bag
While the big banks like Goldman Sachs, JP Morgan, and Citi saw bumper sales in investment banking and trading businesses, BNY put up a solid, though less impressive, showing. Fourth quarter sales and adjusted earnings rose 11% and 33%, respectively, from the year-ago period.
Outlook for Bank of New York Mellon
JPMorgan analyst Vivek Juneja rates Bank of New York Mellon overweight relative to trust bank peers, citing its outlook for positive operating leverage and diversified revenue mix.
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