President Donald Trump held a conference call with the CEOs of the three biggest U.S. banks as the stock market tanked Wednesday.
Trump held the call with J.P. Morgan Chase CEO Jamie Dimon, Bank of America‘s Brian Moynihan and Citigroup‘s Michael Corbat, according to people with knowledge of the situation. The Dow plunged 800 points, or 3%, in its worst day of the year on Wednesday amid a recession warning from the bond market.
The president asked the three men to give him a read on the health of the U.S. consumer, according to one of the people. The executives responded that the consumer is doing well, but that they could be doing even better if issues including the China-U.S. trade war were resolved, this person said.
The CEOs also told Trump that the trade dispute is damaging the outlook for capital spending by corporations, according to another person with knowledge of the discussions. The president was receptive to the notion that uncertainty over trade is hurting corporate confidence, this person said.
Michael Corbat, left, CEO of Citigroup, and Jamie Dimon, CEO of JPMorgan Chase, testify during a House Financial Services Committee hearing in Rayburn Building titled “Holding Megabanks Accountable: A Review of Global Systemically Important Banks 10 years after the Financial Crisis,” on Wednesday, April 10, 2019. (Photo By Tom Williams/CQ Roll Call)
Tom Williams | CQ-Roll Call Group | Getty Images
They also talked about the Federal Reserve and the global economic slowdown that has central banks around the world moving to ease monetary conditions, this person said. One opinion batted around during the call: A 25 basis point cut by the Fed won’t likely change capital flows in the markets.
The call, which lasted about 20 minutes, happened after the CEOs concluded a previously-scheduled meeting with Treasury Secretary Steven Mnuchin in Washington. Trump wanted to speak to the three executives, the men were informed, and he called in from his property in New Jersey. Bloomberg first reported on the conference call.
The discussion was reminiscent of one held in December by Mnuchin during an earlier stock market rout with the heads of the six biggest U.S. lenders.
Bank stocks are among the most hammered recently after the yield curve inverted Wednesday, an unusual event where yields on longer-term bonds fall below that of short-term ones. That’s because falling rates pressure the industry’s profit margins, and also the signal typically means that a recession is coming, which would lead to increased loan defaults.