Wells Fargo CEO: Higher Rates Won’t Kill the Mortgage Market
Despite geopolitical and global market risks, Wells Fargo (NYSE:WFC) Chairman and CEO John Stumpf, says when it comes to the economy, there’s a lot to be excited about. During an interview with the FOX Business Network’s Maria Bartiromo, he explained why he’s “a bit more optimistic than others are.”
“I think the economy will be slightly better than what people are thinking or slightly better than what the numbers have been showing now. If you think about it, we are at a five percent unemployment rate. Next year we are going to get into the four’s. That hasn’t happened but maybe once or twice in my 40 years in the industry… The gas benefit from prices downing has not yet been all spent. Balance sheets for consumers are being cleaned up. Autos -- we had three months in a row where the annualized sale of new vehicles is over $18 million,” he said.
Stumpf also weighed in on his expectations for the Fed and why a quarter-point rate hike won’t impact his businesses bottom line.
“The debate is bigger than the rate… that increase happens and some other increases next year… those are short rates -- it will have a balancing of the curve or flattening of the curve and I think it’s going to any way dampen the demand for credit.” He added, “There’s always this belief that you’re going to kill the mortgage market… even if mortgage rates go up 100 basis points -- that’s not going to kill the mortgage market.”
Stumpf says the bank is handling the burden of the hefty regulatory environment.
“There is a higher threshold; we have to hold more capital, more liquidity... so that’s all on the cost side. On the benefits side is having a national franchise… Since the crisis our growth has been stronger than it’s been in the 35 years I’ve been at the company.”
When it comes to growth, he explained why branches are “critically” important to business.
“Our customers want to be associated with a branch. They open their first account there, they might never go back there but they believe that’s their branch, if they have a problem they can go there and that’s where we get a lot of our growth from.”
When asked if money will become mobile in the next five years he said: “there will always be some phone, some physical location, ATM… But mobile is sure changing the way we do business.”