Paul J. Davies, Columnist
Jamie Dimon’s bank kept much of the pandemic-era gusher of cash in money markets or at the Fed, while BAC investedin bonds.
Paul J. Davies is a Bloomberg Opinion columnist covering banking and finance. Previously, he was a reporter for the Wall Street Journal and the Financial Times.
When the Federal Reserve flooded the economy with cash during the Covid-19 pandemic it exacerbated a problem for America’s largest banks: What to do with all the extra deposits.
Now that interest rates are set to fall four years later, the payoffs from the differing approaches at JPMorgan Chase & Co. and Bank of America Corp. are abundantly clear: The former’s choice to keep spare cash in money markets or at the Fed turned out to be the much more lucrative strategy than investing in bonds.