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Bank of America CEO Brian Moynihan Reveals Research Team No Longer Forecasting a Recession

Brian Moynihan, CEO of Bank of America, recently suggested that the Biden administration and the Federal Reserve have successfully navigated the economy through a “soft landing” after recent inflationary pressures. He indicated that the banking giant no longer anticipates a recession for the U.S. economy.

Despite ongoing economic weaknesses, Moynihan highlighted that consumer spending remains robust, holding steady at pre-pandemic levels. "Our Bank of America Research team is excellent and no longer predicts a recession," Moynihan stated during an interview with CBS’s Margaret Brennan on "Face the Nation." He noted that this represents a significant shift from last year, when a recession was anticipated.

Moynihan observed that consumer expenditure growth has slowed to about 3% compared to the previous year. He attributed this slowdown to high interest rates, which are exerting pressure on consumers. Although spending is still occurring, it is happening at a more measured pace. "The customer is moving more slowly. Although there is money in their accounts, it is gradually being spent," Moynihan remarked. He emphasized that the Federal Reserve needs to be cautious to avoid overly dampening economic activity.

Bank of America anticipates two interest rate cuts this year—one at the Fed's next meeting and another in December—and predicts four additional rate reductions in 2025. This forecast comes after the Fed surprised markets in July by opting not to lower rates.

Regarding the anticipated rate cuts, Moynihan commented, "So we’re getting back to normal, and that’s going to take a while for people to adjust." He added that this adjustment period will affect both corporate and consumer perspectives.

Following a sharp decline in American markets after last week’s disappointing job data and the Fed's decision to hold rates steady, markets have since largely recovered. Additionally, mortgage rates have recently decreased as lenders brace for an expected Fed cut.