Jpmorgan expects to make money from rising interest rates and bumpy markets

Jpmorgan Chase, the nation’s biggest bank, expects to cash in, even as the global economic outlook has grown more gloomy because of threats, including inflation and the war in Ukraine.

At a company investor day event Monday, bank officials predicted that Jpmorgan would meet or exceed its financial targets earlier than expected because of rising interest rates, increasing demand for loans and volatile financial markets.

With the Federal Reserve raising its benchmark interest rate in hopes of taming rising prices, JPMorgan predicted its income from interest payments would rise to more than $56 billion this year, from $44.5 billion in 2021, according to an investor presentation. And it said revenue from trading would probably jump between 15% and 20% this quarter from a year earlier, as clients navigate tumultuous conditions that have threatened to push the S&P into a bear market.

The bank’s shares rose more than 6% after executives announced their predictions, exceeding a 4% jump in a broader index of bank stocks.

“The big news to start the day was that Jpmorgan’s revenue and profitability should be stronger this year than previously expected,” said Alison Williams, an analyst at Bloomberg Intelligence.

Even as the bank’s CEO, Jamie Dimon, said the U.S. economy had been strengthened by “monetary and fiscal stimulation that you’ve never seen before,” executives warned of potential challenges. The uncertainty facing many industries has crimped the once-hot market for corporate dealmaking, and Jpmorgan expected its investment-banking fees to sink about 45% this quarter from a year earlier, said Daniel Pinto, the company’s president.

“We are in a very challenging environment, so the market environment is uncertain,” Pinto said.