The uncertain trajectory of interest rates is making it hard for U.S. banks to forecast profits and leading some to adopt a cautious stance for the remainder of the year.

Banks have reaped high profits in recent quarters as the Federal Reserve started raising interest rates in March 2022 to tame inflation, which boosted net interest income (NII), or the difference between what lenders earn on loans and pay out for deposits.

But that positive effect has been waning, and the outlook for rates is now uncertain, particularly after March inflation data came in higher-than-expected, pushing out Wall Street’s forecasts for when the Fed starts rate cuts.

“It’s certainly challenging these days to forecast NII, given all of the volatility that we’ve seen across a lot of the different data points, as well as some of the uncertainty that’s out there relative to how our clients are going to behave,” Wells Fargo’s finance chief Michael Santomassimo said.

Wells Fargo’s NII fell 8% in the first quarter, hurt by higher interest rates on funding costs, including the impact of customers moving to higher yielding deposit products, as well as lower loan balances. The bank reiterated that its NII could fall 7% to 9% this year.

JPMorgan Chase pointed to similar challenges in navigating the changing rates environment. Chief Financial Officer Jeremy Barnum said on an analyst call following earnings that while its current guidance was not meaningfully different from what it was in the fourth quarter, it was based on the “current yield curve, which is a little bit stale now.”

JPM reported that NII rose 11% but it forecast that full-year income from interest payments would be below analysts’ expectations. JPM’s executives have warned for months that its surging NII was not sustainable.

At Citigroup, net interest income increased 1% year-on-year. The bank forecast that NII excluding markets would be down modestly, as growth would be from non interest-bearing revenue. Citi CFO Mark Mason said on a conference call that the fewer rate cuts expected this year don’t “have a material impact” on the bank’s guidance.

“Notwithstanding a supportive higher-for-longer rate environment, early indications are that banks will mostly maintain their relatively downbeat 2024 net interest income guidance,” said Mark Narron, senior director at Fitch Ratings.