Brian Moynihan, the CEO of Bank of America, has declared that the institution no longer expects a recession in the United States. During his appearance on “Face the Nation,” Moynihan mentioned that the bank had foreseen a recession in the past year, but those worries have now faded. “At this time last year, the outlook was a recession,” he remarked.
“This year we’ve discussed the absence of a recession.”
The most recent forecast from Bank of America indicates that the Federal Reserve’s initiatives to control inflation while maintaining the stability of the U.S. economy are proving effective. Moynihan pointed out that consumer spending has decreased, noting that the bank serves a customer base of 60 million. In July and August, spending growth was around 3%, a figure that is half of what it was in 2023, according to BofA data.
“Consumers have funds in their accounts, but they are gradually using them up. They are employed and earning, yet it seems that they’ve significantly eased their spending,” Moynihan explained. He indicated that an optimistic scenario would see the Fed striving to ensure that its policy adjustments do not overly hinder economic growth, as per the bank leader’s comments.
BofA no longer foresees recession
“We’ve successfully addressed inflation; it’s decreased. It hasn’t reached the desired level yet, but we must be cautious not to strive for perfection to the point of triggering a recession,” Moynihan commented, underlining that Bank of America does not foresee such an event materializing.
Nonetheless, not all experts share this positive outlook. Recent analyses caution that the nation still faces challenges ahead. A particularly disappointing report released earlier this month contributed to a three-day decline in the stock market and rekindled discussions regarding the possibility of an impending recession.
Moynihan indicated that BofA researchers anticipate “we’ll see growth at 2%, followed by 1.5% over the next six quarters, with fluctuations around that growth rate.” Additionally, the BofA team predicts that the Fed will implement two rate cuts this year: one in September and another in December, along with four further reductions in 2025. Bank of America aligns with many forecasts, envisioning an eventual Fed funds rate of between 3% and 3.5%, marking a significant shift from the past 15 years.
Individuals who entered the business sector in 2007 and 2008 have not experienced this sort of interest rate environment,” Moynihan noted. “We are returning to normalcy, and it will take some time for everyone—corporate, commercial, and consumer—to adapt to this change.
