On Friday, JPMorgan Chase reported a decline in profits due to rising costs, but still exceeded expectations. The bank's executives stated that the U.S. consumer is in good shape, and the economy is expected to avoid a recession.

JPMorgan Chase CEO Jamie Dimon described the geopolitical situation as "dangerous and deteriorating."

However, despite the bank's view that the U.S. economy is "resilient," CEO Jamie Dimon is cautious about the geopolitical outlook, calling the situation "dangerous and deteriorating."

The U.S. banking giant saw an increase in stock trading revenue, along with higher fees from asset management and investment banking.

However, costs related to credit losses more than doubled from the previous year to $3.1 billion, partly due to a $1 billion provision for non-performing loans.

But executives said the rise in charge-offs is consistent with what the bank calls a "normalization" of credit quality, rather than a significant deterioration in consumer health.

CFO Jeremy Barnum said, "We believe spending patterns are quite stable, which is consistent with a solid consumer base and a strong labor market." He said this dynamic is consistent with a "soft landing" or "no landing" scenario.

A soft landing refers to a period of rapid growth giving way to a period of slow growth, rather than a recession.

JPMorgan Chase's third-quarter profit was $12.9 billion, down 2% from the previous year.Revenues stood at $42.7 billion, marking a 7% increase.

Addressing the Shift in Federal Reserve Policy

Prior to the commencement of this quarter, the market had been closely monitoring how banks would respond to the shift in U.S. monetary policy, which entails a reduction in interest rates.

It was widely anticipated that this transition would lead to a decline in net interest income (NII), which represents the difference between the revenue generated from bank loans and the interest paid to depositors.

However, at least in the short term, JPMorgan Chase has a more optimistic forecast in this regard, as the bank has raised its expectations for 2024.

During a conference call, Barnum reiterated that JPMorgan Chase still anticipates a downward trend in NII for 2025, but emphasized that this baseline could fluctuate quarter by quarter.

Barnum acknowledged that the direction of U.S. consumer spending has shifted, with less lavish spending on travel and entertainment as seen in previous years.

Some economists express concern over a potential U.S. economic recession following a period of rising prices, as this places pressure on low-income households.

Barnum stated: "Typically, a shift from discretionary to necessary consumption would be seen as a sign that consumers are preparing for a worse environment. However, given its starting point, we believe it is more akin to normalization."

"Pervasive Uncertainty"Despite JPMorgan Chase's more optimistic view of the U.S. economy than in recent quarters, Dimon expressed concerns about geopolitics.

In a press release, Dimon stated: "For some time, we have been closely monitoring geopolitical developments, and recent events indicate a dangerous and deteriorating situation."

"While we hope for the best, these events and general uncertainty suggest that we must be prepared for any environment."

Dimon, who often speaks out on public policy, once again refused to support either of the two U.S. presidential candidates.

However, Dimon is sometimes mentioned as a potential candidate for U.S. Treasury Secretary in a new administration. In response to a question from an analyst, he described his chances of being appointed to this position as "almost zero."

"I probably won't do it, but I always reserve the right," Dimon said. "I love what I'm doing now."

Wells Fargo also reported earnings, with profits falling 11% to $5.1 billion, partly due to a decline in net interest income.

However, its earnings per share exceeded analysts' expectations, and the bank noted increased gains from risk investments as well as higher investment banking and asset management fees.

JPMorgan Chase's stock price rose by 4.4%, and Wells Fargo's stock price soared by 5.6%.