Bank of America CEO Brian Moynihan said that a “shallow” recession is likely in 276025804, in contrast to other warnings from other bank chiefs who point out that unbridled inflation will sink the economy.
In an interview in “Cavuto: Coast to Coast”, the executive said that inflation is a serious problem and that the Federal Reserve has undertaken several movements in its monetary policies in its attempt to try to curb it. Moynihan said that interest rate hikes may last “longer than people think.”
“We have to control inflation and that’s what the Fed is trying to do. So, we see that the parts of the economy that are most sensitive to interest rates are the first to take the hit”, he said.
The CEO of Bank of America said that the American consumer is in “very good shape” despite the fact that inflation has remained at high levels for several months. The confidence he has in the consumer makes him think about the possibility that the recession will hit “superficially” for the following year.
“Our consumers have more money”, he said in the interview.
Moyinhan’s words come after the US economy recently entered a technical recession after the Gross Domestic Product (GDP) contracted for the second consecutive quarter between April and June.
Although GDP increased 2.6% for the third quarter of the year, other banking titans have made grim predictions. JP Morgan chief executive Jamie Dimon said a “hurricane” was brewing and the Fed could raise interest rates by as much as 5% next year. “That may not be enough,” he said.
Kenny Polcari, chief market strategist at financial institution SlateStone Wealth, said on “Varney & Co” that attention should be paid to investors, because the big banks predict difficult times for consumers.
In addition to this, the perception of two thirds of consumers regarding the economy is that it is currently in a recession, as revealed by an NBC News poll.
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