Summary: The consumer remains healthy even though labor markets are slowing. The Fed is expected to lower interest rates by at least a small amount. AI Capex is driving GDP growth. There's more inference demand than supply, but is the hype outstripping those levels?
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Macro
The consumer remains really strong
"So as I've been saying for a long time that I still very much feel that the consumer is an anchor of strength, I think, in our current economy. There are a number of indicators that continue to be very strong. I mean, I think wage growth, low unemployment, the debt burden. Consumer debt burden is very comparable to pre‑pandemic levels and historically at a relatively modest place." – Capital One Financial (COF 0.00%↑) CEO Richard Fairbank
"The consumer has been resilient. We are pleased with second quarter results and momentum has continued third quarter to date. However, the macro environment remains fluid. As such, we believe it is prudent to maintain our cautious view on the consumer for the remainder of the year." – Macy’s (M 0.00%↑) EVP Thomas Edwards
"I would tell you that, like in general, members are pretty rational. The consumer behavior is pretty consistent. And so far, the impact from tariffs has been fairly muted." – Walmart Sam's Club U.S. (WMT 0.00%↑) CEO Christopher Nicholas
"Consumer remains really strong. We saw record spending, I think, this quarter across both our debit and credit cards. And I think as long as that keeps going, the economy otherwise stays pretty healthy, notwithstanding the noise both near term and potentially a little bit longer term on tariffs." – The PNC Financial Services Group (PNC 0.00%↑) CEO William Demchak
"Consumer spending continues to be healthy. This is very consistent with what I shared at our second quarter earnings call...the consumer continues to spend at a healthy clip." – Mastercard (MA 0.00%↑) CFO Sachin Mehra
"The requisite, how is spending going question. The word that comes to mind is strong. There's obviously a lot of uncertainty and sentiment out there. But when we stare at the data, we look at what the consumer is actually doing within our network, we see continued strong performance." – Visa (V 0.00%↑) Chief Product & Strategy Officer Jack Forestell
It’s a strong environment for corporate profits
"Look, overall, despite some obvious cross currents, we see the U.S. economy as really quite resilient. That's been reflected, I think, in corporate earnings in general and certainly in our own portfolio....So overall, I think a strong corporate profit environment. You don't typically see recessions without erosion in corporate profits. And so we're, again, I think, quite constructive right now." – Blackstone (BX 0.00%↑) CFO Michael Chae
"And we certainly have seen very strong earnings. You all have seen that through the first 2 quarters of the year. And we certainly have seen that as well. So we've been very pleased with how customers are navigating an environment which is, in many ways, uncertain." – KeyCorp (KEY 0.00%↑) Head of Institutional Bank Andrew Paine
Companies are continuing to invest through uncertainty
"I don't need to tell all of you, trade uncertainty, legislative uncertainty, regulatory uncertainty, what's going to happen in the economy. It felt like the economy is decelerating, geopolitics, all of it has created a true fog of uncertainty. But I think the real positive thing is that most of our clients are kind of seeing through that. And either innovating, navigating, evolving, adapting, especially to volatility created by uncertainty around global trade." – JPMorgan Chase (JPM 0.00%↑) Co-CEO Douglas Petno
"So I think from where we felt customers from maybe 6 months ago, I would say things are more positive. I think people are addressing the tariffs and people are feeling more comfortable. I wouldn't say the investments are robust, but we are seeing increases now, some of our middle market customers, utilization is going up a little bit, maybe in distribution, [ ABL ]. So I think there's pockets where things are starting to increase and be more positive." – M&T Bank (MTB 0.00%↑) CFO Daryl Bible
Labor markets are softening though
"We are obviously seeing some softening in labor. There are a number of things that are contributing to that. I think one of the things we're going to have to wrestle with is immigration policy has slowed obviously materially people coming in....There are a number of CEOs that are talking about a softening in the economy. There's no question we've seen some job data that indicates that there has been some softening. I think you have to watch that very, very closely as we look ahead. The economy is still chugging along, you know, okay. But there's no question that we're seeing more softening signals." – Goldman Sachs Group (GS 0.00%↑) CEO David Solomon
"Obviously, we noticed the new job creation continues to be pretty modest and maybe with some restatement of some of the numbers as well. So we'll certainly have to keep an eye on that, although we have not seen a corresponding thing that often comes along with that, which is waves of layoffs and things like that. So we'll certainly keep an eye on that." – Capital One Financial (COF 0.00%↑) CEO Richard Fairbank
Is a recession possible?
“I think the economy is weakening. Whether it’s on the way to recession or just weakening, I don’t know.” – JPMorgan Chase (JPM 0.00%↑) CEO Jamie Dimon
A rate cut is on its way
"And now it's likely the Fed is going to start cutting here this month." – Citizens Financial Group (CFG 0.00%↑) CEO Bruce Winfield Van Saun
"There’s no question that when you look at the labor numbers, you know, there's there's a little bit of softening and, you know, I'm pretty confident that we'll have a 25 basis point cut. Whether or not we have a 50 basis point cut, I don't think that's probably in the cards so I would expect a 25 basis point cut and I think you could see one or two other cuts, you know, depending on how economic conditions play out from here. But there’s no question we’re going to see a slight change, you know, in the policy rate as we move into the fall. And I think it'll be really data dependent on how things evolve as we go through the rest of the fall as to how that plays." – Goldman Sachs Group (GS 0.00%↑) CEO David Solomon
International
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