Exactly three months ago, in mid-June, Citigroup CFO John Gerspach warned investors at a Morgan Stanley investment conference that Citi’s second quarter trading revenues would be down 12-13%, mostly due to declining market volatility. A few weeks later, he was proven right when US banks – and especially Goldman Sachs – posted some of the worst trading revenues in over a year.

Fast forward to today, when Citi did it again after CFO Gerspach, this time speaking at a Barclays conference, warned that markets revenue in the third quarter which is ending in less than three weeks, will be down 15%, as the third quarter “is lacking the volatility that pushed revenue higher in third quarter of 2016″ underscoring as he did last quarter, that volatility remains “subdued.” For that he, and his other banker peers, can thank the central banks, who have made selling vol and BTFD the only two concepts an entire generation of traders is aware of.

In a separate warning, the Citi CFO said that investment-banking revenue won’t match 2Q, will be more like 1Q, Gerspach says

On the positive side, Gerspach said that the bank is seeing earnings growth from North American consumer unit, and noted that its financial targets assume “measured” assumptions on the economy.

Following his comments, Citigroup stock briefly turned negative, before rebounding, and while banks pared some pre-market gains during his remarks, the move higher in the 10Y yield has quickly made investors forget that tumbling bank revenue are a far greater concern for profit margins than the already deplorable “NIM” trade. Indeed, at Gerspach spoke, same banks have been rallying as 10Y Treasury yields have risen ~6bps to 2.110%, and as sectors hit hard by Irma rebound.

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