Investors pushed shares of JPMorgan Chase (JPM) and Wells Fargo (WFC) higher on Friday after third-quarter results looked better than feared, a testament to the banking giants’ resilience, pointing to the possibility of a soft landing in the US -Economy points out.

A JPMorgan executive was even willing to link the bank’s performance to that soft landing, citing the strength of the lender’s retail and corporate customers. An economy that achieves a soft landing is one in which inflation declines without causing a recession.

“Broadly speaking, I would say these returns are consistent with the soft landing narrative,” Jeremy Barnum, the bank’s CFO, told reporters. And the fact that companies are optimistic, he added, “fits this kind of Goldilocks economic situation pretty well.”

JPMorgan and Wells Fargo’s profits fell 2% and 11%, respectively, from the same period last year, but those declines were smaller than Wall Street expected.

And they both benefited from big jumps in investment banking as a two-year dealmaking drought appears to be coming to an end. Investment banking fees at Wells Fargo rose 37% from a year ago, while they rose 31% at JPMorgan.

JPMorgan shares rose more than 4% in early Friday trading, while Wells Fargo shares rose more than 5%.

The results kicked off a third-quarter earnings season as lenders face questions about how a new cycle of interest rate cuts from the Federal Reserve next year will affect the largest U.S. banks.

Its competitors Citigroup (C), Bank of America (BAC), Goldman Sachs (GS) and Morgan Stanley (MS) are expected to report their results next week. Their stocks all rose on Friday.

One positive surprise for analysts in JPMorgan’s results was that a key measure of loan profits, net interest income, rose in the third quarter. The bank also increased its estimate of how much net interest income it expects for the full year by $1.5 billion.

However, it is assumed that credit problems will increase. Provisions for loan losses increased 125% to $3.1 billion compared to the same period last year, reflecting increasing challenges for customers, particularly those with credit cards.

But Barnum said that reflected a return to normalized credit patterns, rather than new weaknesses. The U.S. consumer, Barnum said, remains “on a strong footing” and spending patterns “look normal.”

Wells Fargo CFO Mike Santomassimo said lower-income consumers are “the ones who are the most stressed and the most burdened in terms of their spending and credit,” but “we haven’t seen that stress extend significantly to others.” Customer groups have expanded.”

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Wells Fargo’s net interest income, which measures the difference between what banks earn from their lending and what they pay for their deposits, fell 11% from a year ago. This is a sign that the country is now struggling more with the impact of increased interest rates.

It also did not change the estimate of how much the NII would fall for the full year (around 9%).

“I think the positive, when you look at it, is that the fourth quarter will be in line with the third quarter,” Santomassimo added. “So this is the first time in a while that we’ve seen the start of an NII low.”

JPMorgan made clear that it still expects its net interest income to fall next year as the Fed cuts interest rates, telling analysts on Friday that it would likely come in below analysts’ consensus estimate of $87 billion, without giving a specific number.

“It still looks a little lopsided,” Barnum said, “but it’s definitely within reason.”

JPMorgan CEO Jamie Dimon said his bank “reported solid business and financial results in the third quarter,” but also highlighted concerns about geopolitics, saying: “Recent events show that conditions are treacherous and getting worse.”

He said: “Inflation is slowing and the US economy remains resilient,” but “some critical issues remain, including large budget deficits, infrastructure needs, trade restructuring and global remilitarization.”

“While we hope for the best, these events and the prevailing uncertainty demonstrate why we must be prepared for any environment.”

David Hollerith is a senior reporter at Yahoo Finance, covering banking, crypto and other financial areas.

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