- Banks will lag the market in an inflationary environment.
- Banks lagged the market in the inflationary 1970s.
- The reason for this is financial assets go down in real value during inflation.
- Bank Financial assets are just dollars or promises for dollars in the future.
- Most of bank assets are fixed income or dollar themselves.
- Inflation lowers the real value of dollars and fixed income assets.
JPM JP Morgan
BAC Bank of America
WFC Wells Fargo
KBE SPDR S&P Bank ETF
KBWB Invesco KBW Bank ETF