Wells Fargo Chief Executive Officer Charles Scharf stated on Monday that the U.S. economy overall remains resilient, though he also acknowledged that current market sentiment among the American public and businesses is notably low.
Speaking in an interview at the Economic Club of Washington, Scharf said, "From all the data we observe, the U.S. economy is still very strong." He also mentioned that, influenced by various uncertainties stemming from the U.S.-Iran conflict, there is a significant divergence between public sentiment and the actual fundamental state of the economy.
Scharf noted, "The real economy continues to operate stably, and major corporations themselves are in sound financial health—these are positive fundamentals. But when you ask people about their personal feelings, everyone is filled with anxiety."
He further pointed out that, affected by rising gasoline prices, consumers have already begun to reduce and adjust their spending. Overall, the current economic situation remains within a stable range, with only the initial signs of potential negative impacts beginning to emerge.
Earlier on Monday, U.S. President Donald Trump stated in an interview that it is highly unlikely the U.S. will extend the two-week temporary truce with Iran, which is set to expire this Wednesday evening. Trump indicated that until a final agreement is reached, the blockade of the Strait of Hormuz will continue—a situation that has already triggered a supply crisis in the global oil market.
Scharf added, "Once the conflict ends and the strait reopens for navigation, and oil production gradually recovers within a reasonable timeframe, the aforementioned situation will affect areas like consumer spending, but the overall destructiveness is limited. However, if the conflict persists long-term, it will inflict more severe damage on the economy."
Last week, Wells Fargo and other leading U.S. banks reported substantial profit growth for the first quarter. Data from the San Francisco-based bank and its peers showed that consumer spending volumes at the four largest U.S. banks all achieved robust growth between 5% and 9%. During analyst conference calls, Scharf and other bank executives expressed optimism, indicating their belief that the overall U.S. economy and consumer spending remain resilient.
Compared to small and medium-sized specialized credit institutions, large U.S. banks have lower lending exposure to lower-income groups. Furthermore, these banks primarily assess customer financial health based on consumer spending data and unemployment rates—an evaluation framework that does not encompass other financial pressures faced by households.
The optimistic assessment from banking institutions stands in stark contrast to the widespread pessimism among the general public. The latest Consumer Confidence Index from the University of Michigan revealed that U.S. public confidence this month has fallen to its lowest level in the 74-year history of the index.
In the same interview, regarding questions about the Federal Reserve's independence, Scharf voiced support for the Fed operating free from external interference, stating plainly that its independence is crucial. Additionally, he downplayed market concerns about risks in the private credit industry, believing the sector's scale is not yet sufficient to trigger systemic financial risk.
Both of these viewpoints align with previous statements made by his former superior, JPMorgan Chase CEO Jamie Dimon.
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