Bank of America Corp. Chief Executive Officer Brian Moynihan said his firm’s strategists are still expecting a soft landing for the US economy rather than a recession, a prediction spurred by continued strength in consumer spending.
“We won’t have a recession,” Moynihan said Wednesday at a lunch hosted by the Economic Club of New York, noting that consumer spending has softened since earlier this year but remains strong, and that Bank of America customer savings continue to be robust as well.
The CEO’s remarks follow comments last week by Bank of America Chief Financial Officer Alastair Borthwick that prospects for a US recession are getting dimmer amid robust consumer spending. Federal Reserve economists, meanwhile, have also reconsidered their own predictions for a downturn, with Fed Chair Jerome Powell saying in July that his staff had ditched the recession forecast it put in place earlier in the year.
In the wide-ranging discussion Wednesday, Moynihan also said that Bank of America’s commercial customers are in good shape, with strong credit quality and smaller draw-downs on their credit lines than before the Covid-19 pandemic.
Inflation remains a concern, Moynihan said, with labor actions in the entertainment and auto industries potentially leading to higher salaries in both their sectors and others.
“There’s a thousand things out there that can lead to higher inflation,” while other factors could undercut rising prices, Moynihan said.
This article was provided by Bloomberg News.