JPMorgan Chase & Co reported a 17% drop in third-quarter profit on Friday, as a worsening economic outlook curbed dealmaking and prompted the largest American bank to boost its reserves for possible defaults.

The biggest U.S. bank’s results are being closely watched to assess the real impact on corporate America of the Federal Reserve’s aggressive rate hikes to tamp down inflation.

“In the U.S., consumers continue to spend with solid balance sheets, job openings are plentiful and businesses remain healthy,” Chief Executive Officer Jamie Dimon said in a statement.

Dimon, however, cautioned that rising interest rates, inflation and geopolitical turmoil pose significant headwinds.

Typically, rising interest rates are good for banks because they can charge consumers more for borrowing, but the broader risk of an economic slowdown, higher cost of borrowing and the war in Ukraine could cloud the economic outlook and hurt future earnings.

JPMorgan’s profit for the quarter ended Sept. 30 came in at $9.74 billion, or $3.12 per share, compared with $11.69 billion, or $3.74 per share, a year earlier.

JPMorgan CEO Dimon warns of recession in 6 to 9 months

Analysts had expected $2.88 per share. It was not immediately clear if the reported numbers were comparable to estimates.

The bank set aside $808 million in reserves, as the Fed’s interest rate hikes stoke fears of an economic downturn.

By comparison, in the same quarter last year, the bank had released $2.1 billion of reserves that it had kept aside for potential COVID losses.

Revenue from investment banking, one of the bank’s biggest businesses, slumped 43% to $1.7 billion as a mix of high inflation and fears of looming recession forced buyers and sellers to hit pause on deals.

The dearth of activity has led to a slump in banks’ fees from underwriting and advising M&A and initial public offerings, contrasting a record run last year.

The bank reported $32.72 billion in revenue for the quarter, up from $29.65 billion last year.