NEW YORK, (Reuters) – Wall Street’s top banks and asset managers expressed concern about the economic situation as they described how consumers and institutions were dealing with high inflation and looming rate increases.

In an era of rising inflation, big U.S. banks report results. The Fed could increase interest rates this year.

This can be a benefit to big lenders as it increases their income from loans. However, rate rises that are too rapid could cause economic slowdown and hamper any recovery from the pandemic.

“All our clients are experiencing the effect of the inflationary pressures across all areas,” Wells Fargo (NYSE: ) Mike Santomassimo was Chief Financial Officer and spoke on the phone to journalists.

Santomassimo claimed that inflation is not a threat to the bank’s credit portfolios. But, Santomassimo also stated that the bank would be hurt by higher interest rates for mortgage volumes.

Charles Scharf from Wells stated later that the highest rises in energy and food costs are affecting consumers of lower income.

Scharf stated that while there would be an increase in bank credit losses from historic lows, the bank should still consider itself a net beneficiary, as rising rates will help them.

JPMorgan Chase & Co (NYSE:)’s Chief Executive Jamie Dimon on Wednesday warned of economic uncertainties, partly arising from soaring inflation.

Wall Street analysts, investors, and others believe the U.S. Fed Reserve acted too slowly in combating high inflation. Many are now predicting even greater rate hikes once the central bank is caught up.

Dimon stated Wednesday that he sees more rate increases ahead than what the market pricing in. Currently, he estimates 3% by 2023.

Dimon stated, “Those are storm cloud clouds that could disappear or they may stay,” That’s an inescapable fact. “I’m aware of this fact and expect volatility.

Dimon claimed that U.S. Federal Reserve will reverse its pandemic-induced bond buy bonanza and implement quantitative tightening. This is because there will be a huge shift in funds flows as investors change their portfolios.

Goldman Sachs (NYSE 🙂 CEO David Solomon said during the earnings call that he is watching inflation and stress in the supply chain. He also noted the importance of commodity prices, as well as how households are coping with increasing costs.

Solomon said that “we’ve seen an increased risk for stagflation” and mixed signals regarding consumer confidence. “These cross currents are certain to create continuing complexity in economic outlook.”

BlackRock Inc. (NYSE 🙂 talked about how its clients had to deal with the shifting economic environment and adjust their fixed income portfolios.

Laurence D. Fink is chairman and chief executive. Fink pointed out that Russia’s invasion caused a supply shock for commodities which was further increasing inflation.