One of the primary beneficiaries of high inflation in rent times are banks, and this is because their profit margins tend to expand when higher prices force central banks to raise interest rates. That was the thinking as many investors bid up bank shares while rates climbed and inflation reached multi-decade highs. At the moment, megabanks, including Citigroup and JPMorgan Chase, are disclosing that hot inflation in one area – employee wages – are casting a shadow over the next few years. Shares of JPMorgan fell more than 6% on Friday after the bank said that expenses would climb 8% to roughly $77 billion this year, driven by wage inflation and technology investments. According to CFO Jeremy Barnum, higher expenses will likely push the bank’s returns in 2022 and 2023 below recent results and the lender’s 17% return-on-capital target.

James Dimon, chairman and CEO of Jamie Dimon, told analysts that wage inflation would be a recurring theme among corporations this year. Some companies will navigate the change better than others, he said. “Please don’t say I’m complaining about wages; I think wages going up is a good thing for the people who have the wages going up,” Dimon said. “CEOs shouldn’t be crybabies about it. They should just deal with it. The job is to serve your client as best you can with all the factors out there.”