Bank of America CEO Brian Moynihan recently shared his thoughts on the current state of the economy, consumer behavior and the bank’s outlook on potential Fed rate cuts.
In an interview, Moynihan touched on various economic indicators and their impact on Bank of America’s strategy.
Moynihan highlighted the bank’s extensive individual business, noting that it closely monitors the financial transactions of 66 million consumers. According to CEO data, over the past 12 months, consumer spending growth has declined from 10% to around 4.5-5%, indicating a more stable economic environment.
While this slowdown is seen as positive in terms of controlling inflation, Moynihan said the Fed should cut interest rates sooner. Bank of America’s research team, led by Mike Avon, takes a cautious approach to the economic slowdown, predicting a soft landing with a positive growth rate of 1%.
The BofA CEO said major research groups expect four rate cuts in 2024 and four in 2025.
Touching on the housing market, Moynihan expressed the importance of decreasing interest rates to stimulate mortgage activity. He argued that despite initial hesitations, consumers will adapt to the changing interest rate environment and this will lead to greater activity in the property market next year.
Furthermore, according to Moynihan, the Fed will have to reduce interest rates even if there is no economic slowdown.