01:50 PM EDT, 10/14/2025 (MT Newswires) -- Citigroup ( C ) Chief Executive Jane Fraser on Tuesday underscored the US economy's overall strength, even though she pointed out stretched market valuations in some areas.

The world's biggest economy remains a "pace setter," driven by consumer spending and investments in artificial intelligence and data centers, Fraser said during an earnings call, according to a FactSet transcript.

However, "there are pockets of valuation frothiness in the market, so I hope discipline remains," Fraser said.

Investors have bet big on AI names, driving tech valuations higher, with some participants warning that the AI spending boom may be a bubble.

"Overall, while growth is cooling somewhat and we're keeping an eye on the labor market, America's economic engine is indeed still humming," she said.

Most of Federal Reserve officials indicated last month that it would be appropriate to further lower interest rates later this year amid growing concerns around the labor market, minutes from the central bank's September meeting showed last week.

Fraser said that domestic spending in China has slowed, but the Asian country has made "staggering" investments in technology.

Citigroup ( C ) beat expectations for its third-quarter results, joining Wall Street peers JPMorgan (JPM), Goldman Sachs (GS) and Wells Fargo (WFC) that also reported stronger-than-expected financials on Tuesday.

Citigroup's ( C ) earnings rose to $1.86 per share from $1.51 a year earlier, surpassing the FactSet-polled consensus of $1.73. Revenue grew 9% to $22.09 billion, ahead of analysts' estimate of $21.09 billion. Net interest income gained 12%, while non-interest revenue increased 4%.

Banking revenue climbed 34% to $2.13 billion, driven by 39% and 23% gains in corporate lending and investment banking. Wealth revenue of $2.16 billion increased 8%, while the US personal banking division rose 7% to $5.33 billion.

Citigroup's ( C ) shares were up 4.5% in Tuesday trading, and have risen about 43% so far this year.

Price: 100.26, Change: +4.16, Percent Change: +4.33