Big Banks Tap Bond Market After Strong Earnings, But Higher Borrowing Costs Loom

Wells Fargo and JPMorgan tapped the US investment-grade market after posting strong earnings and raising outlook guidance.

Banks are borrowing despite higher costs as they need to meet regulatory requirements for total loss-absorbing capacity.

Recent earnings have been supportive for credit spreads, which could encourage more issuance.

Investors remain interested in big bank debt as it's considered a safe haven.

Analysts expect total issuance from big banks to reach up to $24 billion by year-end after recent earnings results.