CNBC reports that according to the Institute of International Finance (IIF), U.S. banks are likely to report “record level” earnings in 2021 as the American economy recovers and financial markets remain buoyant.

Tim Adams, chief executive of the IIF, said that the improving economy will help bank lending and fee income to pick up while more investing activity will boost trading revenue.

“I think we’re going to see record-level earnings this year so it’s a good year for banks. We see it in the bank stocks, and I think it’ll continue to reflect those underlying, really strong fundamentals for at least the rest of this year,” Adams told.

Many of the big U.S. banks last month reported first-quarter earnings that exceeded analysts’ expectations on several financial metrics.    

The improved performance of banks comes as the U.S. economy recovers from the Covid-19 pandemic slump. The recovery spurred worries among investors that a quicker rise in inflation could prompt the Federal Reserve to tighten monetary policy sooner than it had hoped to.

Adams said it’s time the Federal Reserve starts talking about the possibility of tapering monetary policy. But there’s been little indication that Fed Chair Jerome Powell would do that soon, he added.