Dive Brief:
- President Donald Trump held a conference call with the leaders of three of the nation's top banks as the market plunged Wednesday, according to Bloomberg.
- Sources said JPMorgan Chase Chairman and CEO Jamie Dimon, Bank of America Chairman and CEO Brian Moynihan and Citigroup CEO Michael Corbat were in Washington for a previously scheduled meeting with Treasury Secretary Steven Mnuchin when they participated in the call with the president, who was at his resort in Bedminster, New Jersey.
- The Dow Jones Industrial Average had its worst day of the year Wednesday, dropping 800 points, or 3%, amid warnings of a recession.
Dive Insight:
A source told CNBC that Trump asked the CEOs about the health of the U.S. consumer. The executives told the president consumers are doing well, but they could be doing better if issues such as the China-U.S. trade dispute were resolved, the source said.
The CEOs said the trade war is damaging the outlook for capital spending by corporations, according to another source, who added the president was receptive to the notion.
During the 20-minute call, the executives also discussed the Federal Reserve and the global economic slowdown, the source said.
"One opinion batted around during the call: A 25-basis-point cut by the Fed won't likely change capital flows in the markets," CNBC reported.
Bank stocks took a beating Wednesday after the yield curve inverted, an event that occurs when interest rates on short-term bonds are higher than interest rates paid by long-term bonds. The event has been a reliable warning sign of an eventual recession for the past 40 years.
