Bank of America CEO Brian Moynihan recently shared his views on the current state of the economy, consumer behavior and the bank’s perspective 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 comprehensive individual activities, emphasizing that they closely monitor the financial transactions of 66 million consumers. According to the CEO’s data, over the past 12 months, consumer spending growth has decreased from 10% to approximately 4.5-5%, indicating a more stable economic environment.
While this slowdown is seen as positive in terms of inflation control, Moynihan said that the FED should cut interest rates early. 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%.
BofA CEO said major research teams expect four rate cuts in 2024 and four in 2025.
Touching on the housing market, Moynihan expressed the importance of the decrease in interest rates to stimulate mortgage activities. He argued that despite initial hesitations, consumers will adapt to the changing interest rate environment and this will lead to increased activity in the housing market next year.
In addition, according to Moynihan, the FED will have to reduce interest rates even though there is no economic slowdown.