What Trump’s Return May Mean for Banks

Donald Trump’s victory in the 2024 presidential election immediately made waves across financial markets, with U.S. bank stocks rallying on expectations of deregulation and potential tax cuts. According to Reuters, shares of major lenders like JPMorgan Chase, Bank of America, and Goldman Sachs surged between 8% and 13% on Wednesday, reflecting optimism about a more favorable regulatory environment and a pro-business stance in Washington. 

In addition to lighter regulation, Trump’s economic agenda is expected to cut corporate taxes and reduce restrictions, moves that could benefit banks’ bottom lines. A Wall Street Journal analysis suggests that Trump’s high tariffs and plans for aggressive fiscal policy could also boost inflation and Treasury yields, which would influence lending rates and bank profits. Additionally, with Trump’s Republican allies gaining ground in Congress, American Banker notes that Republican control of the Senate could smooth the path for his policies. 

Despite the initial boost, questions remain about the long-term impacts of Trump’s proposed tariffs and potential immigration restrictions on the broader economy, which could influence the banking sector in unexpected ways. Here are some headlines on our radar: 

What Trump’s Win Means for the Economy 

The Wall Street Journal outlines Trump’s economic priorities of tariffs and targeted tax cuts, noting that while these moves may stimulate growth, they also carry inflation and deficit risks. Economists caution that broader market forces and unexpected events will play a significant role in determining the ultimate impact on the U.S. economy. 

Donald Trump’s Election Victory Stands to Reshape Financial Regulation 

Barron’s reports that Trump’s expected regulatory rollback will potentially include an overhaul of SEC leadership, which could ease restrictions on the crypto sector. “[With] Trump in the White House, advisors will see a big push to essentially gut or dilute many of the market-conduct rules adopted under the [Gary] Gensler regime,” Duane Thompson, president of the consultancy Potomac Strategies, said. 

Goldman, Citi Soar With Trump Poised To Deliver Deregulation 

Bloomberg notes that the president-elect promises to eliminate 10 regulations for every new rule introduced. Analysts also highlight that the financial sector, particularly investment banks, may benefit from Trump’s commitment to reducing Basel III capital requirements, aligning with banks’ calls for a lighter capital framework. 

How is your bank preparing for the new administration? We’d like to hear from you. Email us at insider@rmahq.org.