Glenn Schorr: Actually, I think you hit on it. So I’ll just do a follow-up on a related — so the notion of private credit doing large traditional investment-grade lending activity, it may be part of the competitive landscape that limits the ability to push price in Jamie’s letter, you talked about the downside or my question is, what’s the downside if more of the mortgage credit asset-backed intermediation business is pushed out of the banking system?
Jeremy Barnum: I mean, I guess it depends on what you mean by downside, but I just think societally speaking, I think we’ve seen in recent history that when home lending is happening outside the regulated perimeter and things get bad, when you have economic downturns, it purchases bad outcomes for individuals and homeowners on as a whole. So I mean, Jamie has written about this extensively. Beyond that, financially, we’ve talked about how mortgage lending — I mean, the profitability swings obviously is reasonably cyclical. And in the recent past, it’s actually very profitable, then it was less so like the correspondent channel right now is actually picking up a little bit. But it’s a thin margin business. It’s challenging. And when you increase the Cap requirements, it makes it even harder.
So that just becomes one of the areas where you’re in that tension between remixing versus pricing power that we talked about a second ago. And it might impact me in that we do less credit available for homeowners and more regulatory risk as the activity moves outside the perimeter.
Glenn Schorr: Appreciate. Thanks, Jeremy.
Operator: Next, we’ll go to the line of Betsy Graseck from Morgan Stanley. You may proceed.
Betsy Graseck: Hi, good morning. Yes, I just wanted to unpack a little bit more the drivers of the change you outlined that’s coming in the 10-Q, Jeremy, regarding the asset sensitivity going from liability sensitive to asset sensitive, at least that’s the way I read it. I just wanted to understand what the drivers of that is?
Jeremy Barnum: Yes, sure. Betsy. I mean, as you know, — that’s always been a challenging number. It’s manages a risk management measure of store, so that’s also somewhat limited in that respect. And it has been an uneven usefulness in terms of potential to be able to predict our NII trajectory when rates change. But as we looked at that and tried to improve it and spoken to all of you through this latest rate hiking cycle, we’ve come to the conclusion that it would improve the usefulness of the disclosure, if we included in the modeling the effect of deposit repricing lags — and so we’ve done that, and that just has the effect that I talked about, it increases the EAR number by about $4 billion from minus $1.5 billion, which is roughly what it was last quarter and what it would have been this quarter without the change to something more like $2.5 billion.
But all the usual caveat supply, right? I mean it’s never – the answer is going to hold for any given change in rates, the change in our NII is always going to be for one reason or another different from what that disclosure shows. But we do our best to…
Betsy Graseck: Okay. And so is it fair for me to think about that change as a mark-to-market to where we are today. And when I think about your forward guide here, longer term, you’re saying, look, deposit betas are accelerating. So as I go through the 10-Qs over the next four or five quarters, I should expect that, that 2.5% should come down because deposit betas you’re anticipating are going to be accelerating from here? I’m just trying to put those two things together.
