Not Much has Changed

Growth has come down but the overall environment is fairly solid

Summary: It's been a month since the Fed lowered interest rates and (not surprisingly) not much has changed in the economy. Growth has still come down from its peak, but the overall environment is fairly solid. In fact, the environment may be a little more solid than the Fed expected. At least one FOMC member is saying that he'd be open to a pause in November.

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Macro

Not much has changed since the Fed lowered rates
"The short answer...is not much has changed since in the last three weeks." – Wells Fargo (WFC 0.00%↑) CFO Mike Santomassimo

Growth has decelerated
"On the revision from the 4% to low single digits, the combination of recovery of the consumer in the U.S., frankly, has been slower than we had anticipated... everything is impacted by affordability even for medium-income consumers or medium-high income consumers." – PepsiCo (PEP 0.00%↑) EVP & CFO Jamie Caulfield

Decelerating growth and inflation
"Our overall picture would be one of decelerating growth, decelerating inflation, and central banks responding by easing policy. That's what we see today." – Blackstone (BX 0.00%↑) President Jon Gray

Labor markets are cooler
"While, overall, the economy continues to grow at a solid pace...the cooling in the labor market is noticeable." – Federal Reserve Vice Chair Philip Jefferson

But the overall environment is fairly solid
"So I think what there is to say about consumer spend is a little bit boring in a sense, because what's happened is that it's become normal. So meaning -- I mean, I think we're getting to the point where it no longer makes sense to talk about the pandemic... we're not seeing weakening, for example, in retail spending. So overall, we see the spending patterns as being sort of solid and consistent with the narrative that the consumer is on solid footing and consistent with the strong labor market." – JPMorgan Chase (JPM 0.00%↑) CFO Jeremy Barnum

Consumers remain resilient
"Both our consumer and commercial customers have remained resilient... Both credit card and debit card spend were up in the third quarter from a year ago. And although the pace of growth has slowed, it is is still healthy." – Wells Fargo (WFC 0.00%↑) CEO Charlie Scharm

Companies are excited for lower rates
"So as we think about what the next several months, quarters, and years look like, we're likely going to be on an easing cycle where interest rates are actually going to make vehicles more affordable even at the current price point." – General Motors (GM 0.00%↑) EVP & CFO Paul Jacobson

The Fed is likely to continue moving
"I believe it will likely be appropriate to further reduce the target range for the federal funds rate over time toward a neutral posture, with the size and timing of reductions depending on incoming data, the evolving outlook and the forward-looking balance of risks around this outlook." – St. Louis Fed President Alberto Musalem

But they could take a pause
"I am totally comfortable with skipping a meeting if the data suggests that’s appropriate…So that already signals that I’m open to not moving at one of the last two meetings if the data comes in as I expect…This choppiness to me is along the lines of maybe we should take a pause in November…I’m definitely open to that…We may get ‘janky’ reports from time to time, and the question will be, ‘Do they signal a new trend?’…It’s a journey to get to neutral, and the nuance of, ‘Do you move 25 basis points here? 50 basis points there?’…I don’t think those are as consequential." – Atlanta Fed President Raphael Bostic

Investors are holding a lot of cash
"Many investors have large cash holdings, money market industry assets are hitting new records in the quarter, including BlackRock's own cash position, which had $61 billion of net inflows. But investors will have to re-risk to meet their long-term return needs." – BlackRock (BLK 0.00%↑) Chairman & CEO Laurence Douglas Fink

Jamie Dimon is in no rush to deploy excess capital
"If you look at it roughly, we have about a minimum $30 billion of excess capital. And for me, it's not burning a hole in my pocket. I look at it as you own the whole company and you can't properly deploy it now is perfectly reasonable to wait... Cash is a very valuable asset sometimes in a turbulent world. And you see my friend Warren Buffett stockpiling cash right now. I mean, people should be a little more thoughtful about how we're trying to navigate in this world and grow for the long-term for our company." – JPMorgan Chase (JPM 0.00%↑) Chairman & CEO Jamie Dimon

Valuations are very inflated
"I've been quite clear that I think things -- the future could be quite turbulent and asset prices in my view... are inflated. I don't know if they're extremely inflated or a little bit, but I prefer to wait." – JPMorgan Chase (JPM 0.00%↑) Chairman & CEO Jamie Dimo

Markets do not stay high forever
"We do talk to a lot of shareholders and they understand buying stock back at more than two times tangible book value is not necessarily the best thing to do, because we think we'll have better opportunities to redeploy it... Markets do not stay high forever." – JPMorgan Chase (JPM 0.00%↑) Chairman & CEO Jamie Dimon

International