CEOs of major banks have taken the stand in a series of congressional hearings regarding predicted tough financial times ahead. 

CEOs of major banks have taken the stand in a series of congressional hearings regarding predicted tough financial times ahead. However, the banks do not seem too worried about a potential recession. Kristin Myers, the editor in chief at TheBalance.com,&nbsp; joined Cheddar News to discuss. "Consumers are doing much better than they were back in 2008 during that big recession," she said. "We see a lot of households have far more money, their savings are up, and then of course when it comes to them and their futures, they're holding a lot more capital than they were previously."

Big Banks CEOs Get Grilled by Congress

and big bank ceos are sounding the alarm on the inflation fight warning tougher times ahead for the economy in a congressional hearing yesterday joining us now to discuss what's next is Kristin Myers editor in chief at the balance dot com. Kristen, thank you so much for joining us this morning. What were some of the key takeaways from yesterday's congressional hearings with major bank C E O. S and what are you expecting to come out of today's hearing? Yeah, that's a really great question. I think one of the really biggest things that we saw yesterday in that hearing in front of Congress is the bank's ceo one, pointing out as you just mentioned that there are really tough times ahead. But really the big thing here is that they're not actually afraid of a recession at all. Citibank's jane fraser frankly coming out and saying, hey, we know that times are going to get difficult ahead. We know consumers might be struggling going forward, but at least when it comes to the banks, they are not at all worried about potentially hard times. And and there's two reasons really for this one, consumers are doing much better than they were back in 2008 during that big recession, we see a lot of households have far more money, their savings is up and then of course when it comes to the and their futures, they're holding a lot more capital than they were previously. That of course is by design and because of regulation now when it comes today, we have the Senate banking committee Elizabeth warren. Senator warren is of course on that committee and I expected to get a little bit contentious today. Senator Warren tends to really go after the banks really hard and I expect things like overdraft fees really taking a highlight today. Now lawmakers are expected to question the C. E. O. S about how consumer finances are holding up. Now you mentioned that consumers are doing better now than they were in 2008 but we do know that consumers are struggling a little bit still to this day. So what would you say has been the biggest issues that consumers are dealing with at this moment? Well inflation, inflation, inflation, honestly the cost of frankly everything from your rent to your groceries is far too high. And we are hearing a lot of consumers saying that, Hey, even though we have seen inflation starting to abate a little bit 8.3% in August things are still incredibly expensive, households are still spending far more of their incomes on just basic. And so that has been something that has really been hammering consumers as a result. Of course we saw retail sales, that growth being really sluggish. We're hearing of course that the holiday shopping season might not be as robust as it has been at least as it was last year. So this is really impacting consumers heart. And then on the flip side because of higher interest rates if you want to buy a house if you want to buy a car, you're really going to struggle there, not just from the higher prices, but also from the higher cost of that loan. And so all of this is really squeezing consumers. But again, we are still seeing household balance sheets fairly strong. We are seeing consumers still having really robust savings. We don't anticipate huge crashes because people can't afford to pay the loans that they took out. Now. It seems like the big banks from Bank of America to Citibank have only gotten bigger over the past five years now, as we head into this midterm election season, what would you say are the biggest hot button political issues they'll have to answer to, especially from say some of their more outspoken critics like Senator Elizabeth Warren. Yeah, So well when it comes to Senator Warren, it's going to be all about those overdraft fees. We have seen a lot of the banks take on a lot of regulatory oversight because of things like overdraft fees for example. And you can imagine a lot of Democratic senators are going to be asking some of those questions, but hey, this is political theater when it comes to these congressional hearings. I mean, just yesterday, these banks were taking on issues around the climate array around abortion rights, around the merchant code for gun purchases, for example, a lot of the republicans really wanted to hammer the banks on that. We've heard them talk about their dealings with Russia and china, everything is honestly on the table, especially as midterms are coming up, every politician that is up there is going to use this as an opportunity to really get some of their points across on whether it's on a social justice issue or a banking issue in a written testimony. Kristen Jpmorgan's ceo says that regulations have made banks play it too safe with capital requirements, putting them at a disadvantage against foreign competitors. Do you think that's a fair assessment? Yeah. Jamie Diamond, frankly coming out and even saying that a lot of the foreign banks, especially in china, frankly could essentially buy and sell a lot of the american banks if they wanted to look china is of course a huge economic threat, um, an issue for the american banking industry and we have heard this before. But here's the fact when it came time to the last recession, a lot of these banks really struggled and frankly needed billion and billion dollar bailouts because they were not yet ready to take on, uh, that essentially economic downturn and a lot of regulators said we cannot afford to do this again. And that is actually part of the reason why some of these banks right now, they've been going through the stress testing and they say, hey, we're fine, we're going to be able to make it through the recession and frankly that is in part because of some of the regulations. So I think some of those comments are probably a little bit unfair because some of those regulations again, are we really, what is bolstering these american banks to go into the potential economic downturn? That hard landing that might be coming as the Fed continues to raise rates Christy. I want to talk about the Fed here really quickly. Of course we did see that 75 basis point rate hike that we were widely expecting Fed chair jerome Powell, acknowledging this could cause economic pain for millions of american businesses and consumers, Can you walk us through what consumers should expect? Yeah, So going forward, if you want to buy a house, it's going to get more expensive. Unfortunately, we're not seeing home prices come down as much as I think a lot of uh, prospective home buyers would like and they're going to have to pay more in terms of that interest rate when it comes to a mortgage mortgage. Good thing, If you have an arm, that's that adjustable rate mortgage, you might be able to see that mortgage rate come down in a couple of years or you have the opportunity to refinance for a lower rate, same thing goes, if you want to go out and buy a car, you're going to spend more money for that loan and then frankly, for everyone else, If you hold credit card debt, it's probably going to get more expensive. So these higher interest rates really mean two things things are going to get more expensive, but hopefully on the flip side prices are going to come down. Uh So that's I think what a lot of american consumers really should be expecting going forward, things are going to get a little bit more difficult, things are going to continue to get more expensive. But again, this is the time really to save maybe in a high yield savings account because unfortunately the banks are not paying more even though those interest rates are going up, they're not paying more in terms of those savings accounts. But really this is a time to pay off those debts and to really increase your savings, Kristin, thank you so much for your time and your insight breaking that down. So clearly for us today, that's Kristin, Myers editor in chief at the balance dot com.