Bank of America CEO Predicts �Slight� Recession This Year

cnb - CNBC

Cetoex News - Bank of America�CEO Brian Moynihan has predicted a �slight,� recession this year, warning interest rates won�t fall until 2024. Specifically,�Yahoo�reported Moynihan�s prediction that interest rates could cease falling until the second quarter of next year.

Moynihan was speaking at the Financial Review�s Business Summit in Australia, discussing the country�s current economic outlook. Moreover, the CEO noted �the labor market is still very tight,� with businesses having �access to capital, albeit at higher costs.�

Bank of America CEO Talks Recession and Interest Rates

Speaking yesterday, Federal Reserve Chair�Jerome Powell�gave the country a grim prognosis. Stating his expectation that interest rates could be on an upward trajectory. Despite a year-long hike in interest rates to battle inflation, and a potential recession, for the country in the coming year.

Now, Bank of America CEO Brian Moynihan predicted a �slight� recession this year. Moreover, the executive warned that interest rates are not likely to fall until sometime in 2024. Conversely, interest rates are currently sitting at 4.75%, the highest since 2007. Coinciding with Powell�s statements yesterday, it seems they may get even higher.

Bank of America Expects Fed to Raise Interest Rate to 6%
Source: Bloomberg

�They�re going to have to hold it there for a long time because frankly, the labor market is still very tight,� Moynihan stated. Adding, �Despite what you hear about layoffs, and financial conditions are strong, so companies have access to capital, albeit at higher costs.�

Additionally, Moynihan noted that consumer activity was unaffected by the Federal Reserve interest rate hikes. Noting that they actively �have money in their accounts,� which could force the Fed�s actions even more.

Federal Reserve
Source: Pixabay

�Our base projection is or a recession to occur in the U.S. economy beginning in the third quarter of 2023, occur through the fourth quarter of 2023, and into the first quarter of 2024,� Moynihan remarked. Ultimately, stating that an economist contraction between 0.5% and 1% every quarter will result in �a very slight recession in the scheme of things.�

Conclusively, Moynihan predicted an economic slowdown so tame �a lot of people aren�t going to see that much of it,� in his opinion. Describing it as a �technical recession as opposed to a �deep drop.'�

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