The news also comes against the backdrop of rising oil prices fuelling inflation concerns and lifting expectations of further European Central Bank (ECB) rate hikes. While Iran has dismissed United States President Donald Trump’s talks of negotiations as “fake news,” reports claiming administration insiders as sources stated that Washington would continue its strikes against the Western Asian nation.

Talking about Bund yields, Germany’s 10-year government bond yield, ‌the euro area’s benchmark, ⁠dropped 0.5 ⁠basis points to 3.01%. A couple of days back, it reached 3.077%, its highest level since June 2011.

Money markets have fully priced ‌in two European Central Bank interest rate hikes ⁠by July 2026, along with a deposit facility rate at 2.65% by year-end. The ratio currently stands at 2%.

According to Reuters, Germany’s two-year yields, more sensitive to expectations for policy rates, were down 1.5 bps at 2.60%. They hit 2.764% the day before, their highest level since July 2024. Italy’s 10-year government bond yields fell one bp to 3.91%, after recently reaching 4.119%, their highest since July 2024.

The yield gap of ⁠Italian government bonds versus Bunds was at 85 bps. It was at 63 bps before the attacks against Iran and hit 53.50 in mid-January this year, its lowest level since August ‌2008. The French spread, on the other hand, was at 69 bps ⁠from 58 bps before the conflict.

Discussing the existing money market mood, Commerzbank rates strategist Hauke Siemssen said, “Markets look set to remain in sell-off mode as latest headlines out of the Middle East point to prolonged energy price increases.”

Goldman Sachs also expects the ECB to deliver two 25 basis point interest rate hikes in April and June 2026.

“At the April meeting, only a few data pointers for March will be available, which would render a potential hike a risk management exercise and a sign of commitment to stay ahead of the inflation curve. More hawkish-leaning council members seem in favour of an April hike, while centrist council members ‌should ultimately tip the balance,” Siemssen concluded.

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Sara Naison-Tarajano, a 27-year veteran of the firm, most recently served as Global Head of Private Wealth Management (PWM) Capital Markets and Global Head of Goldman Sachs Apex, the firm’s dedicated family office business. Her appointment underscores Goldman Sachs’ commitment to grow its premier wealth management platform and the firm’s differentiated ability to harness One Goldman Sachs to serve clients. She replaces David Fox, who will retire after 27 years with Goldman.

Founded in 1971 and acquired by Goldman Sachs in 2003, Ayco works with many of the world’s largest companies to provide financial wellness programmes and executive counselling. The venture’s services include investment management, financial planning, tax preparation, and estate coordination, delivered through a team of experienced professionals dedicated to helping clients optimise their financial lives.

Sara Naison-Tarajano joined Goldman as an analyst in the investment banking division in 1999. She became a managing director at a global investment giant in 2012. In 2020, she was promoted to partner.

Discussing Ayco, along with BNY Pershing, the company will enter the client custodial referral market, a space previously dominated by Charles Schwab and Fidelity Investments, thereby challenging the latter’s position in the sector.

BNY Pershing’s programme will be launched later in 2026 under the name “BNY Advisor Match Service.” It will provide “one or two” advisor referrals to clients upon request based on criteria set up by the custodian, according to the venture’s market filing.

Goldman Sachs Ayco, on the other hand, has already started a referral programme with Creative Planning, Mercer Advisors and Wealth Enhancement, according to the registered investment advisors, which are also among the largest in the United States.

The post Goldman Sachs Ayco gets new boss as it targets custodial referral market appeared first on International Finance.

In May 2024, the financial venture obtained a licence to establish its regional headquarters in Riyadh, where it has had an office since 2008. The wealth management team will extend the office’s capabilities.

“Saudi Arabia has an exceptionally dynamic economy and a highly sophisticated investor base. The bank plans to open up local and global investment opportunities for regional clients,” said Rob Mullane, Goldman Sachs’ co-head of private wealth management for the EMEA (Europe, Middle East and Africa) region.

The firm has transferred Yousef Alhozaimy and Khalid Soufi as private wealth advisors to be based in Riyadh. While making public its plans about increasing its Gulf presence, Goldman Sachs informed the media about actively hiring for private wealth advisors and other positions. The new unit will employ its ‘One Goldman Sachs’ strategy by collaborating with asset management, global banking and markets teams in the region.

Goldman Sachs Private Wealth Management division is primarily focused on creating customised personalised management strategies for ultra-high net worth individuals, families, and select institutions, including foundations and endowments. As of 30th September 2025, the venture had USD 1.8 trillion worth of client assets under supervision.

The bank is among global firms expanding their footprint in the Kingdom as the Gulf major seeks to reduce its dependence on oil revenue by investing in sectors such as financial services, under the ambitious economic diversification agenda called the “Vision 2030.”

As per the S&P Kingdom’s asset management industry, the sector grew by an average of around 12% per year between 2015 and 2024, with assets under management (AUM) reaching around 295 billion dollars as of March 31, 2025.

In the words of Timucin Engin, Head of Research and Strategy at S&P in Riyadh, the Gulf major has remained the largest player in the region when it comes to asset and fund management. As per the official, “We expect that assets under management (AUM) will continue to grow at a healthy pace and could exceed half a trillion US dollars by the end of 2030 — subject to market conditions. This is due to ongoing regulatory efforts, as well as the continued growth of debt and equity markets, and the increasing availability of exchange-traded funds (ETFs), real estate investment trusts (REITs), and other retail and institutional products.”

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How does banking sector adopt AI?

Banks have accelerated their AI research and use cases due to the rise of ChatGPT. Legacy institutions are also facing the heat from the fintechs, which are deploying state-of-the-art AI-backed models to take care of functions like customer service, fraud detection, and automation of repetitive tasks. As pioneers in the digital revolution, fintech companies were among the earliest adopters of AI to support financial services and operations.

Now, feeling the heat from these new players, legacy financial institutions like JPMorgan Chase, Bank of America, and Goldman Sachs are going ahead with the technology to reduce costs, boost efficiency, compliance, personalised service, predictive analytics, and increased competitive advantages.

Technologies like machine learning, data analysis, natural language processing (NLP), and computer vision are now widely used in the financial sector when it comes to understanding the financial behaviour and requirements of customers before offering them tailored products.

Talking about banking industry biggies adopting AI in their operations, Morgan Stanley in June 2024 launched its “AI @ Morgan Stanley” suite of GenAI tools for Financial Advisors (FAs). The OpenAI-powered tool, with client consent, generates notes on a Financial Advisor’s behalf in client meetings and surfaces action items. After the meeting, it summarises key points, creates an email for a Financial Advisor to edit and send at their discretion, and saves a note in Salesforce.

Another Wall Street biggie, Goldman Sachs, has taken a measured approach in adopting AI. As of March 2025, half of the 46,000 employees at the investment banking giant have access to the technology. The firm is currently experimenting with agentic AI, which has yet to be deployed across the firm, despite the apparent benefits in the automation of key tasks such as compliance checks or the processing of customer transactions.

Broader use of generative AI within the company came with the launch of GS AI Assistant, which rolled out in 2024 and has been expanded to 10,000 employees, including bankers, traders, and asset managers. This tool, which Goldman Sachs anticipates will be available to nearly all employees by the end of 2025, can summarise documents, draft emails, analyse data, and create personalised content.

However, it is JPMorgan Chase that has been aggressive in adopting AI in its operations. The bank has taken a top-down approach to adoption, adding Chief Data and Analytics Officer Teresa Heitsenrether to its technology leadership team in June 2023 and putting an AI assistant called LLM Suite in the hands of 140,000 employees by October 2024. The company also rolled out ChatCFO, a generative AI tool for finance teams, apart from implementing prompt engineering training for new hires.

Now, a very compelling question: Can banks use ChatGPT or, in that sense, any other AI chatbot as a personal finance advisor?

Discussing the possibility

In 2024, two universities in the United States analysed more than 10,000 responses to financial exam questions from large language models such as ChatGPT and Bard. They found that AI is not likely to replace human advisors any time soon.

However, the Washington State University and Clemson University study asked the AI tools to provide the reasons behind the answers and compared the responses with those from human advisors. While they found that two versions of ChatGPT performed the best (particularly 4.0, a paid version), there was inaccuracy when topics were more advanced.

The AI responses were best for questions around securities transaction reviews and monitoring market trends, but it struggled with areas such as client insurance coverage or tax status.

Study author DJ Fairhurst of WSU’s Carson College of Business, said, “It’s far too early to be worried about ChatGPT taking finance jobs completely. For broad concepts where there have been good explanations on the internet for a long time, ChatGPT can do a very good job at synthesising those concepts. If it’s a specific, idiosyncratic issue, it’s really going to struggle.”

To prove their point, Fairhurst and co-author Daniel Greene of Clemson University used questions from licensing exams, including the Securities Industry Essentials exam, as well as the Series 6, 7, 65, and 66.

To move beyond the AI models’ ability to simply pick the right answer, the researchers asked the models to provide written explanations apart from choosing questions based on specific job tasks, financial professionals might actually perform.

Of all the models, the paid version of ChatGPT, version 4.0, performed the best, providing answers that were the most similar to human experts. Its accuracy was also 18% to 28% higher than the other models. However, things changed when the researchers fine-tuned the earlier, free version of ChatGPT 3.5 by feeding it examples of correct responses and explanations. After this tuning, the AI model came close to ChatGPT 4.0 in accuracy and even surpassed it in providing answers that were similar to those of human professionals.

“Both models still fell short, though, when it came to certain types of questions. While they did well reviewing securities transactions and monitoring financial market trends, the models gave more inaccurate answers for specialised situations such as determining clients’ insurance coverage and tax status. Fairhurst and Greene, along with WSU doctoral student Adam Bozman, are now working on other ways to determine what ChatGPT can and cannot do with a project that asks it to evaluate potential merger deals. For this, they are taking advantage of the fact that ChatGPT is trained on data up until September 2021 and using deals made after that date, where the result is known. Preliminary findings are showing that so far, the AI model isn’t very good at this task,” reported SciTechDaily in December 2024.

The researchers’ final verdict was that ChatGPT can be better used as a tool to assist rather than as a replacement for an established financial professional. On the other hand, AI may change the way some investment banks employ entry-level analysts, as Fairhurst said, “The practice of bringing a bunch of people on as junior analysts, letting them compete and keeping the winners – that becomes a lot more costly. So, it may mean a downturn in those types of jobs, but it’s not because ChatGPT is better than the analysts, it’s because we’ve been asking junior analysts to do tasks that are more menial.”

Weighing on the topic, Oliver Hackel, Senior Investment Strategist at Kaiser Partner Privatbank AG, said, “In any case, AI certainly doesn’t lack self-confidence, not even when it comes to crafting the right wording. This is demonstrated impressively when the chatbot is asked how Donald Trump would explain Bitcoin. You can hardly get the voice of the former US president out of your head afterwards. But are ChatGPTs from the US-based artificial intelligence research firm OpenAI or its numerous kin also suitable to act as investment advisors? Our virtual mystery shopping tour revealed that chatbots still lack the necessary financial education. Moreover, even more powerful generative language model versions in the future will not be capable of replacing intimate conversations between clients and advisors.”

First-hand experiences

Andrew Lo, director of the Laboratory for Financial Engineering at the MIT Sloan School of Management, sees LLMs (Large Language Models) like ChatGPT as “glorified search engines” that will excel in helping their users to find information fast, apart from being a good source of general advice on how to set up a budget or improve credit score. However, getting accurate answers on specific, sensitive financial questions is where the concerns start.

“Many AI platforms lack domain-specific expertise, trustworthiness, and regulatory knowledge, especially when it comes to providing sensitive financial advice. They might even lead individuals to make unwise investments or financial decisions,” Lo warned.

Still, as per an October 2024 Experian study, many Americans are already turning to AI chatbots for financial management help, and among the 47% who reported doing or considering the practice, 96% have a positive experience.

However, a new study from the broker analysis site, Investing in the Web, found that tools like ChatGPT might not be very good at the job. To prove their point, researchers asked ChatGPT 100 questions related to finance and then had the answers reviewed by industry experts at their company. In the report, AI responded to 35% of financial queries incorrectly, with one in three answers being hallucinated on questions centred on finances and investments.

In response to questions like “How [do I] save for my child’s education?” “How does the average pension compare to the average salary?” and “What are the pros and cons of investing in gold?” the chatbot answered 65% correctly, while 29% were labelled incomplete or misleading, and 6% were found to be completely incorrect.

Pedro Braz, CEO of Investing in the Web, said in a statement that it’s important to cross-check the sources (of the answers generated from an AI tool), especially with financial information that relies on timely data that is subject to change, such as interest rates and daily stock performance.

“ChatGPT has well-recognised issues with up-to-date information. It is best to go to the very source of the information, rather than asking AI chatbots for financial data,” he added.

As Hackel entered OpenAI’s virtual office and asked his first question regarding a suitable investment strategy, the chatbot started out by alerting him that it was not a certified investment consultant and could not give specific investment recommendations.

“But as is the case with so many other subjects, ChatGPT quickly sheds its restraint when we chat about a hypothetical example. Our query asks ChatGPT to construct for an investor with a moderate risk appetite a multiasset portfolio composed of 15 to 20 ETFs that outperforms a simple 50/50 portfolio of stocks and bonds over the long term. Within seconds, the advisory bot recommends a mix of low-correlated asset classes. Stocks, bonds, commodities, and alternative assets are just the ticket, the bot says, and it names corresponding ETFs,” he noted.

After a few more follow-up questions, Oliver Hackel and his team ended up with a portfolio of 25 ETFs that also incorporates small and midcaps, sector-based, factor-based, and thematic strategies as well as exposure to international markets alongside the United States in its equity component.

“The original portfolio also becomes broader and more diversified in its fixed-income component and its allocation to alternative assets in the course of the client advisory conversation. However, the electronic advisor seems a little overwhelmed by a sophisticated client like ourselves,” he noted.

The limits of AI in finance

While stating that AI-powered tools like Perplexity and ChatGPT can help people who are looking for advice on saving and budgeting, investment planning, and credit score improvement, Christina Roman, consumer education and advocacy manager at Experian, terms the technology a great starting point for consumers who otherwise might not be able to afford professional financial advice.

“I don’t think that this is going to make people reliant on AI for these types of services, but I think it’s a great tool that can help them to navigate their financial lives and to understand complex topics like investing and whatnot,” Roman said.

While each prompting experience will differ, an individual can provide relatively simple details about their financial situation, and generative AI can produce a fairly elaborate plan. It has to be well-crafted, something like this: “I need help managing my money. I make $50,000 a year. I have $10,000 in credit card debt on one credit card and $2,500 in debt on another credit card. My rent each month is $750. My car payment each month is $450. I have $150 in other utility expenses. I only have $250 set aside in my emergency fund. Can you help me get on track?”

When Fortune.com put these prompts inside ChatGPT, the AI tool provided separate sections like “Budgeting with a 50/30/20 Rule (Customised for You), including a monthly income estimate,” “Spending Breakdown,” “Debt Repayment Strategy: Snowball or Avalanche,” “Emergency Fund Goal,” “Budget Adjustments” and “Automate Payments and Savings and Example Action Plan for Next Month.”

So, using well-crafted prompts will become the guardrail here, apart from asking AI follow-up questions and adding more details about your financial situation and goals. It will only help the platform understand your unique circumstances and offer resourceful information.

However, Roman advises that people be very cautious with the output. AI platforms hallucinate, and that means the advice they offer may not be grounded in best practices, or even in any sound personal finance reality.

Furthermore, she advises being generic about the information they provide to any generative AI platform since the user may not realise the way his or her information will be saved or used to train the AI model itself.

Generative AI platforms are innovating by the minute, and there is no question that the ChatGPT of 2025 is more accurate and detailed than the version which came out a couple of years ago. But that is exactly what worries some financial experts. Hallucinations can be hidden in plain sight, and individuals without financial expertise or experience may not know the difference.

In Andrew Lo’s recent research paper on using generative AI for financial advice, he cited an example where ChatGPT 3.5 made up the author names for a paper it used to back up its responses. While this may not seem like a serious offence, when it comes to statements that involve financial risk, hallucinations could ruin someone’s finances.

“AI platforms may not always disclose as much source or background information as you might want or need. For example, when asking ChatGPT for investment advice, it recommends investing in companies like Microsoft. While human financial advisors may do the same, everyday users may not realise that Microsoft has invested over $13 billion in OpenAI, the parent company of ChatGPT. The chatbot does not note the conflict of interest to users unless it is pointed out,” Lo suggested.

Future of AI in financial services

Working with a human financial advisor allows for more conversation-based financial planning. Details about one’s financial status and goals can be discussed further to create a personalised plan that includes an understanding of all risks tied to potential money moves.

Generative AI will provide financial advice with just a few minor details, and individuals who take that insight without thinking (or even double-checking things) about their full financial picture could make costly mistakes.

Yes, LLMs are becoming more advanced, and one can imagine a future where generative AI is much more integrated into the financial advising ecosystem.

However, Michael Donnelly, the interim managing director of corporate growth at the CFP Board, says financial professionals may be more capable than others in making a strong case that technology cannot replace human advice. He engaged in a similar conversation a decade ago, during the rise of robo-advisors.

Donnelly advocates that financial advisors learn to accept AI as a tool that is great for things like internal practice management, as the technology will save advisors time better devoted to strengthening personal relationships, a hallmark of the financial planning profession.

“For consumers, AI won’t eliminate the need to work with a human financial planner,” Donnelly said, though Lo expressed concerns for those without access to dedicated financial advisors.

“We don’t have any guardrails yet in terms of how large language models are able to provide advice to consumers. And I think that on the regulatory front, we do need to have more careful guardrails, but on the research front, it really opens up a whole new set of vistas for us to explore,” Lo added.

Lo equated the situation to the fact that consumers largely have access to lower-risk mutual funds or money market accounts, but there are much greater regulations when it comes to who can deal with riskier private equity or hedge fund investments. AI, largely, has no guardrails.

He recommends a three-pronged approach to making AI’s role in finance safer. First, investors must be aware of AI’s tendency to hallucinate and ensure that any response generated by tools like ChatGPT is thoroughly fact-checked. Second, financial institutions adopting AI as a personal finance advisor must build safeguards to detect abuse and misuse. Finally, strong regulatory frameworks must take precedence to guide responsible use.

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“We have moderated our risk positioning since April 2nd – I think that’s a sensible thing for us to do. We are absorbing a lot of risk from our clients. We want to continue to do that, but we also, where we can, we (pare) our risk and stay a little bit closer to home,” Goldman Sachs President John Waldron said in a podcast released by the investment bank.

According to Goldman Sachs, he is maintaining a larger liquidity cushion in anticipation of ongoing uncertainty in the upcoming months. Since Donald Trump’s so-called “Liberation Day,” when he declared his intention to raise tariffs on trading partners, financial markets have been tumultuous.

The tariff move was “very, very disruptive,” according to John Waldron, who is generally regarded as Goldman Sachs CEO David Solomon’s likely successor.

He stated that some businesses are now beginning to base their business decisions on the presumption that tariffs will be increased to between 10% and 15%.

“We’re now moving into an adjustment phase, and you’ll see, I think, some more decision-making on capital spend, M&A transactions, capital return, stock buybacks,” John Waldron said.

According to him, the American economy is still robust due to a strong labour market and consumer spending.

“All those factors in the US to me lead to a likely scenario where we don’t have a recession,” he said.

In the meantime, John Waldron cautioned that investors were growing anxious about the US budget deficit, which was unsustainable.

“The bond market is starting to be heard, and I hope that gets some attention in the halls of Congress,” he said.

In May 2025, Moody’s, the final major ratings agency to downgrade the United States, lowered its pristine sovereign credit rating by one notch, citing worries about the country’s mounting debt load of USD 36 trillion.

“The path of interest rates, especially in the long term, is the biggest question for markets,” John Waldron concluded.

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Due to the expanding investor base, favourable demographics, continuous reforms, deepening capital markets, and digital transformation initiatives, the industry is anticipated to see consistent inflows in 2025–2026, with AUM expected to surpass SAR1.3 trillion (USD 350 billion).

Global fluctuations, like those brought on by the United States government’s tariff hikes on April 2, can still affect the market. One of the main elements that could have an impact on the sector is changes in the price of oil.

Bashar Al Natoor, Global Head of Islamic Finance at Fitch, said, “Saudi Arabia’s asset management industry is the largest in the GCC, with AUM having crossed SAR1 trillion, and further growth expected. Almost all mutual funds listed on the Saudi Exchange are sharia-compliant, indicating strong demand for Islamic products.”

Asset managers connected to Saudi banks accounted for almost two-thirds of industry revenue. Nonetheless, global competition is intensifying.

The establishment of regional headquarters in Saudi Arabia in 2024 was approved by regulators for BlackRock, Goldman Sachs, Morgan Stanley, Citigroup, and Mizuho Bank.

In October 2024, an earlier report by Fitch noted that growth in 2025 would be further supported by a rising number of high-net-worth individuals seeking asset management services within the Kingdom.

Fitch now sees international competition likely intensifying as global players such as BlackRock, Goldman Sachs, and Morgan Stanley, as well as Citigroup and Mizuho Bank, have received regulatory approval to establish regional headquarters in the Kingdom.

According to Fitch’s report, by 2030, the government wants the industry’s AUM to account for 40% of GDP (2024: 26%).

Discretionary portfolio management (DPM) and public funds accounted for about half of the industry’s AUM, with private funds coming in second.

Real estate and stocks make up the majority of the private funds’ AUM. Local shares make up around half of AUM under DPM. It said that money market funds, stocks, REITs, and debt instruments make up a portion of the AUM of public funds. The Fitch analysis also highlighted that around half of Saudi Arabia’s AUM is held in private funds, followed by discretionary portfolio management and public funds.

The Saudi Exchange dominated the GCC listed equity markets, which at the end of 2024 had a combined capitalisation of over USD 4 trillion.

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“I think in 2025 we will certainly be at 10-year averages. We might even be ahead of the 10-year average,” David Solomon said in an interview at the Reuters NEXT conference in New York.

Since Donald Trump won the US presidential election, bankers have been more optimistic about deals. Many stated that it was too soon to predict what economic policies the incoming administration would implement, but some predicted that friendly regulators would be placed atop important government agencies, eliminating regulations that some people found burdensome.

“I am quite optimistic that this administration is going to run a very, very pro-growth agenda. The first 100 days, obviously, will give us some indication about the balance of whether it’s trade policies, immigration policies, energy policies, tax policies – how the combination of those things will come together,” David Solomon added.

Over the past year, Goldman Sachs has profited from a recovery in investment banking, solidifying its position as the leading global firm offering merger and acquisition advice.

Goldman Sachs advised Cheez-It manufacturer Kellanova, which agreed to be acquired by candy giant Mars in August for almost USD 36 billion, in one of the year’s largest transactions.

Denis Coleman, the chief financial officer, previously stated at Goldman Sachs’ financial services conference that he anticipates a surge in “strategic” business transactions in 2025, including significant mergers and acquisitions. Although private equity firm buyouts have been sluggish, bankers anticipate a surge in activity in the upcoming year.

In the meantime, Goldman Sachs keeps reducing the consumer business that David Solomon used to support.

The bank had to write down its assets and sell assets after its retail operations lost billions of dollars. Since then, Goldman Sachs has returned to its core competencies in trading and investment banking.

When asked if the bank could begin trading cryptocurrencies, David Solomon responded that rules would have to change for the bank to be able to do so.

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Although Saul Martinez’s team of analysts predicted that investment banking fees would rise, their projections for Goldman Sachs and Morgan Stanley already account for a roughly 30% increase over 2024 levels. Martinez wrote in a note that both banks should be held rather than outperformed because “we think market expectations are much higher than they have been, leaving room for disappointment.”

As investors anticipate that United States President-elect Donald Trump’s policies, such as tax cuts and less regulation, will spur economic growth and increase bank stocks, bank stocks experienced a sharp decline following his victory in the United States presidential election.

Since November 2024, Goldman Sachs and Morgan Stanley have both increased by 14% and 13%, respectively, the day after the US election, when the KBW Bank Index jumped by nearly 10%.

Martinez’s hesitancy is hardly unique, as some analysts, such as Mike Mayo of Wells Fargo and Co., are bullish, calling the catalyst a “watershed moment” and seeing the potential for a “super cycle” in capital markets.

After the rally, JPMorgan Chase was downgraded from outperform to perform by Oppenheimer analysts, who cautioned that the bank had guided to lower net interest income.

The index that follows the top 34 US banks, which includes Citigroup, Morgan Stanley, JPMorgan Chase, and Goldman Sachs are on course for their best year since 1997. After holding onto its gains after the election, the index is predicted to reach a new high soon.

Martinez clarified in his note that he is even more optimistic about fundamental outlooks today than he was previously, despite the downgrades. He also increased his estimates for earnings per share for both banks to account for higher investment banking, asset and wealth management fees, and “much higher buybacks.”

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Citigroup has seen the largest reduction, with a decline in headcount by 2,000 employees after a reorganisation aimed at increasing profits and streamlining management layers.

Bank of America, Wells Fargo and PNC Financial also saw a decrease in headcount by a combined 2,000 jobs compared to the previous quarter.

Despite investor expectations that the Federal Reserve will control inflation and avoid a major economic slowdown, there is still uncertainty about potential interest-rate cuts later this year.

Citi has recently announced that it will cut 7,000 jobs, as part of their plan to reduce staffing by 20,000 over the next two years.

These cuts will be reported in upcoming quarterly earnings as employees complete their notice periods. Citi’s Chief Financial Officer, Mark Mason, informed reporters about this on Friday.

Many industry executives have acknowledged the challenges of navigating the changing rate environment.

Analysts predict that higher funding costs, contracting net interest margins, and uneven trading results are likely to make banks more cautious.

Bank of America CEO Brian Moynihan said, “We managed headcount. We noted the expectation in January of last year that our headcount will be down throughout the year.”

The second-largest lender has reduced its staff primarily through attrition, meaning that it has not been filling positions when employees leave.

According to Brian Moynihan, the bank’s headcount has decreased by more than 4,700 since the first quarter of 2023.

On Wall Street, investment banks have seen higher revenue, thanks to a revival in capital markets. Executives are optimistic that a surge in equity offerings will boost sentiment and lead to more mergers and acquisitions.

Goldman Sachs and Morgan Stanley are two investment banks that have experienced a decline in headcount by 900 and 396 respectively.

However, Morgan Stanley’s finance chief Sharon Yeshaya stated that the bank is still making “opportunistic hires.”

In 2023, Goldman Sachs underwent its biggest round of layoffs since the global financial crisis of 2008. In contrast, JPMorgan Chase added almost 2,000 employees in the first quarter, increasing their total headcount to 311,921.

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Brent crude futures went up by 51 cents to USD 83.54 a barrel. On the other hand, US West Texas Intermediate crude futures were up 64 cents at USD 78.55 a barrel.

“[Hostilities] in and around the Red Sea by Iran-backed Houthi rebels on commercial ships are guaranteed to continue keeping the geopolitical risk premium at an elevated level,” PVM Oil’s Tamas Varga told Reuters.

United States crude inventories rose by 3.5 million barrels to 442.9 million barrels in the week ending February 16, the US Energy Information Administration (EIA) said, compared with analysts’ expectations in a Reuters poll for a 3.9 million-barrel rise.

“US crude inventories have climbed amid outages at large refineries that have left utilisation rates at the lowest level in two years, though the plants are soon to resume output,” Reuters stated further.

Refinery utilization rates were unchanged during the middle week of February 2024, at 80.6%, according to EIA data, compared with analysts’ expectations of an uptick to 81.5%, according to a Reuters poll.

BP’s 435,000 barrel-per-day (bpd) Whiting refinery in Indiana, the largest in the US Midwest, will return to full production capacity in March 2024, after a power outage since February 1.

“TotalEnergies’ 238,000-bpd refinery in Port Arthur, Texas, is also working to complete a restart, though it is still operating minimally following a weather-related power outage. The outages have drawn down distillate inventories, which include diesel and heating oil. Those stockpiles were down by 4 million barrels in the week to 121.7 million barrels, versus expectations for a 1.7 million-barrel drop,” Reuters reported further.

Volatility Strikes

However, oil prices registered a fall on February 26, extending losses on market views that higher-than-expected inflation could delay cuts to high-interest rates that have been capping growth in global fuel demand.

Brent crude futures fell 39 cents, or 0.5%, to USD 81.23, whereas US West Texas Intermediate crude futures (WTI) were down 34 cents, or 0.4%, at USD 76.15.

Despite the February 22 rise, Brent lost about 2% and WTI fell more than 3% on signs that the United States Federal Reserve was in no hurry to cut interest rates.

In fact, market sentiment appeared focused on higher-for-longer interest rate expectations that lifted the US dollar and pressured commodity prices, as per the observations of independent analyst Tina Teng.

A stronger dollar makes oil expensive for buyers with other currencies. Prices have been trading between USD 70-90 a barrel since November 2023 as rising supply and concern over weak Chinese demand offset OPEC+ supply cuts despite two wars raging in Ukraine and Gaza.

“The geopolitical risk premium on Brent crude from Yemeni Houthis on ships in the Red Sea remained modest at only USD 2 a barrel,” stated Reuters, while quoting Goldman Sachs analysts.

However, Goldman Sachs has raised its summer peak price projection for oil to USD 87 a barrel, up from USD 85, after Red Sea disruptions drew larger than expected draws in stocks held by developed countries.

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