Could AI boom bring about a three-day working week?

**Leanna Byrne** (0:01)
America's biggest banks are posting bumper profits. It's World Business Express from the BBC World Service. I'm Leanna Byrne. We'll have the latest on US inflation data and why Zoom thinks we could be working a three-day workweek.
Yep, it's a big day for American banks today. They've begun reporting their second quarter earnings. JPMorgan Chase led the pack with record-breaking profits, nearly up 40% on last year. US business correspondent Michelle Flurry picked through the numbers for us.

**Michelle Fleury** (0:38)
The story was the same really across the board, which was it was perfect conditions for the big banks, pretty much picture-perfect. In the case of JPMorgan, biggest quarterly profit on record up 41% to $21.2 billion. Investment banking, stock trading was a huge driver of profits, not just at JPMorgan, but for all of the major firms. You know, bear in mind, this is the same quarter that saw the launch of SpaceX on the NASDAQ market site where it started selling shares. That helped drive profits at several of the big Wall Street firms.
In addition, you know, more generally, you've got that kind of AI-driven capital spending and the need for companies to raise more money. So Google, for example, sold shares. That also helped some of these big banks kind of, you know, make more money. And the consumer, I was just listening to Bank of America CEO Brian Moynihan talking, saying the consumer is looking in pretty good shape here in the United States.

**Leanna Byrne** (1:40)
So do we expect that to continue? Because there seems to be more AI IPOs on the cards. As Samsung reportedly is considering a NASDAQ listing too.

**Michelle Fleury** (1:49)
Yeah, I mean, it was fascinating because, you know, I just mentioned CEO Jamie Dimon of JP Morgan Chase saying that it was near perfect conditions for bank earnings. But at the same time, he also warned that there were several economic risks, which he described as shifting below the surface like tectonic plates. I mean, we used a colourful language from him. He didn't disappoint. He basically warned of geopolitical tensions, of fiscal deficits around the world, of also sticky inflation. So he sees, you know, problems down the road that are kind of hard to predict how they will play out, but that could be manageable or could lead to severe disruptions. And he's not sure which will, will sort of how it will play out.

**Leanna Byrne** (2:33)
Michelle Fleury there. With me now, Rachel Winter, Partner and Investment Manager at Killick & Co. Rachel, how's this playing on the stock markets? Is this a boost for share price for banks across the board?

**Rachel Winter** (2:46)
Well, the shares are looking good today, but we had expected this to be a great quarter for the banks. So a lot of this good news has been priced in, and therefore we haven't seen some massively extreme reactions today. JPMorgan, for example, is up a fairly modest 2%.
That said, Goldman Sachs is up over 7%. So clearly, those particular results were far ahead of what people had expected.

**Leanna Byrne** (3:07)
There you go. And Michelle mentioned inflation data. We got the latest data on how fast prices rose in June for US consumers. And it shows that it cooled as energy prices fell momentarily last month on the US-Iran deal. It rose by 3.5% on a year-on-year basis, down from 4.2% in May. But Rachel, can we take anything from that? Because that seems to be old news, right?

**Rachel Winter** (3:32)
Yes, it is old news. And I think your use of the word momentarily there is absolutely correct. So inflation did go down in June because of a temporary drop in oil prices. However, this month, we know that yesterday, for example, Brent crude, the global oil benchmark, went up by over 9% in a single day. So it's likely that inflation is now heading upwards again.

**Leanna Byrne** (3:53)
And what does this mean for the Fed?

**Rachel Winter** (3:55)
Well, when you have higher inflation, that means that you need higher interest rates to keep that inflation under control. So it's likely that interest rates might now go up sooner than previously thought if inflation does continue to rise.

**Leanna Byrne** (4:07)
Okay, Rachel, well, you stay right there.
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