The U.S. banking industry has faced several challenges over the past year, but several big banks were able to post improved profitability driven by higher net interest incomes. However, the Federal Reserve is expected to start cutting interest rates sometime this year.
Moreover, a sluggish economy, deterioration of asset quality, higher deposit costs, and the likelihood of default on commercial real estate (CRE) loans could put pressure on the U.S. banking system. Amid this uncertain backdrop, investors could wait for a better entry point in JPMorgan Chase & Co. (JPM) and Wells Fargo & Company (WFC).
