Finance & Economics

Bank of America CEO Believes in Optimistic Prospects for US Economy

Brian Moynihan, CEO of Bank of America, positively assesses the prospects for the dynamic of the economic system of the United States and characterizes as affirmative possibilities of the financial institution headed by him for the development.

Bank of America CEO Believes in Optimistic Prospects for US Economy

During a speech at the Reuters NEXT conference last Wednesday, November 8, the head of this lender said that, in his opinion, the American economy will enter a stage called a soft landing. He does not believe that the probability of a recession risk for the United States is significant. Brian Moynihan assumes that the process of slowing down in the American economic system will begin in the middle of next year.

The head of one of the largest financial institutions included in the structure of the banking sector of the United States also said that the most characteristic features of the current economic climate in the country are a decrease in consumer spending and commercial borrowing. At the same time, he does not perceive these trends as a kind of global threat or barrier, overcoming which will require significant efforts.

Brian Moynihan’s optimistic attitude is based on his confidence in the general state of consumer finances. Also, the head of the bank, recognizing the problems associated with the dynamics of Americans’ spending, still believes that this situation is not catastrophic and in the future will not demonstrate a deterioration that has a global negative character. Brian Moynihan suggests that consumer financial activity will allow the United States to avoid the implementation of a negative scenario of recession.

Bank of America experts predict that by the end of this year, the American economic system will demonstrate positive dynamics in the form of growth at the level of 2.7%. Their assessments of the prospects for 2024 are less positive. Experts predict that next year the American economic system will show growth of 0.7%.

The bank also expects that the Federal Reserve System will continue to implement the policy of raising interest rates shortly. In their opinion, the next decision to increase the corresponding indicator will be made in December. They believe that interest rates will rise in the range of 5.5% to 5.75%. Brian Moynihan admits the possibility of one more increase in this indicator before the end of the current year. Experts of the financial institution predict that in the second half of 2024, the process of lowering interest rates will begin.

Brian Moynihan expressed satisfaction with the plans of the investment unit of Bank of America to expand the team of employees. This arm of a financial institution is focused on investment banking in the middle market. The lender has already increased the staff of the unit from 60 to 200 people and is currently planning to double the number of staff.

According to the results of the third quarter of this year, Bank of America traders received the highest income in more than ten years. The lender’s investment bankers also showed good results. In this case, special attention should be paid to the fact that positive indicators were recorded against the background of an industry-wide decline.

During Wednesday’s speech, Brian Moynihan also took time to talk about Bank of America succession planning. He stated that an algorithm of actions and decisions has already been developed at the moment when his time in his current post expires. Brian Moynihan did not talk about specific deadlines. According to the media, this is noteworthy, since recently Wall Street has been paying close attention to succession issues.

Returning to the topic of the likelihood of the prospects for a soft landing of the American economy, it should be noted that Brian Moynihan is not the only one who believes in the corresponding prospects. For example, in September, Goldman Sachs CEO David Solomon made a similar statement. In his opinion, over the past year, the probability of a soft landing scenario has increased. At the same time, he noted that inflation may be more long-lasting than expected. David Solomon also expressed an optimistic assessment of the ability of the United States economic system to avoid a recession. Separately, he noted as a positive factor the resumption of the capital markets, where significant initial public offerings of shares are taking place.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.