Wells Fargo’s (WFC) at Deutsche Bank Conference Notes

John Shrewsberry – Chief Financial Officer

Optimism has faded a bit and confidence is lower

“we saw in the wake of the election and going through the fourth quarter a lot of optimism. It felt like it was going to produce real results as a result of the policy initiatives that have been all the rage….as a result of no real forward momentum on any of those fronts and frankly a little bit more of a sense of paralysis in terms of getting that legislative agenda through, my sense is that people are waiting and seeing. There still is a lot of optimism, especially at the small business end of things, but I think confidence is lower that these signature policy initiatives are going to come through….I think we are in a holding pattern from an optimism and momentum point of view until something breaks policy or legislative wise.”

Wholesale commercial customers are on wait-and-see mode

“so I think the wholesale customer, on average, is going to wait and see to figure out what the tax consequences, the trade consequences, the regulatory consequences are of deal activity or expansion activity.”

Long rates could stay low despite a hike in the summer

“…each time we’ve had a move in the front end, the long end has reacted by going down, and here we are in the 220 context, at least at the end of the day yesterday. So even if we get a move in summertime and a move at the end of the year, unless something changes on the policy side, which it could something that’s stimulative, something that’s inflationary, something that’s growthy, it feels like long rates could stay, could stay low.”

Yield curve may flatten

“something is going to have to change to not flatten if short-term rates come up, because there hasn’t been any stimulus for long-term rates to move up and stay up since the fourth quarter.”

US consumer not overburdened with debt

“I don’t think that we believe that today that the U.S. consumer is overburdened with debt, either with respect to cash flow in terms of the ability to service it, or with respect to the value of their assets given what’s gone on in home price appreciation over the time frame that you described. And in part I would give credit to the way mortgage origination has changed post Dodd-Frank in the modern era.”