Venkat Veeramani warns that U.S. banks are underestimating a mix of macro risks, from energy-driven inflation and private credit opacity to stablecoins and AI disruption, all of which could reshape funding, profitability, and policy expectations.
Persistent energy inflation, opaque
private credit markets, and the rise of stablecoins are creating a more complex
risk environment for U.S. banks, with traditional models struggling to keep
pace.
According to Venkat Veeramani, SVP,
Chief Economist, Wintrust Financial Corporation, these forces could drive
abrupt policy changes, weaken funding stability, and challenge long-term
profitability if institutions fail to adjust in time.
Veeramani argues that one of the most
underappreciated threats is the possibility that volatile energy prices become
structurally embedded in inflation.
While the Federal Reserve would
normally discount short-term moves in oil and related products, he warns that
prolonged disruption could change that.
“Reintroduced energy-driven inflation
may prompt a hawkish response by the Fed,” he says.
That matters because many banks have
positioned balance sheets and hedge strategies around falling rates. If policy
instead turns tighter, margins and economic value could come under pressure.
Private credit is another major
concern. Veeramani points to the market’s rapid growth outside the traditional
regulatory perimeter as a source of rising systemic risk. If economic
conditions deteriorate, the opacity and leverage in that sector could amplify
stress in ways the broader market has not fully priced.
At the same time, banks may be
underestimating how quickly financial technology could alter their core
business model.
Veeramani sees stablecoins as a
potentially disruptive force in funding, lending, and payments.
If adoption accelerates, the result
could be a structural shift away from historically sticky deposit funding
toward more expensive wholesale sources, putting pressure on margins and
changing competitive dynamics across the sector.
The indicators he is watching most
closely reinforce this more fragile picture.
“Credit spreads and new job opening
rate are a couple of economic indicators that I am watching closely,” he says.
Credit spreads remain compressed by
historical standards, reflecting confidence in the resilience of the U.S.
economy. But that resilience is starting to show strain, and increasing
uncertainty could cause markets to reprice risk more sharply than many expect.
Labor market trends are also raising
questions. Veeramani notes that the U.S. economy has recently added only 6,000
jobs per month over a three-month period, compared with a five-year average of
180,000.
