Brian Moynihan, Chairman and Chief Executive Officer of Bank of America, said that, in his opinion, the economic system of the United States is currently on the path to a soft landing and noted that a potential recession scenario probably will not become a reality.
According to media reports, the head of one of the largest American financial institutions last Wednesday, September 27, during a speech at the Economic Club of New York, where a discussion was held on the methods of the Federal Reserve System used in countering inflationary phenomena and the regulator’s policy on interest rates, said that the growth rates of consumer prices demonstrated the dynamics of the decline compared to the degree of intensity recorded last year. At the same time, he noted that consumer prices are still moving upward. This assessment of the state of affairs in the economic sector is confirmed by Bank of America data.
Brian Moynihan said that the Fed’s efforts to combat inflation have already had some positive results in the near term. At the same time, the head of the financial institution suggested that interest rates are likely to be at a high level for a period that is longer than the timescales that were originally expected.
Bank of America CEO positively assessed the actions that the Fed is taking as part of efforts to counteract the scaling of the inflationary process but noted that in this case excessive decisions should be avoided and economic activity should not be limited. In his opinion, the regulator should follow the concept of a balanced approach. Brian Moynihan is convinced that this strategy is necessary to ensure further economic growth.
Goldman Sachs CEO David Solomon believes that the probability of a soft landing, which the head of Bank of America is talking about, has increased significantly over the past year. At the same time, in his opinion, inflation may turn out to be more stable and as a phenomenon will persist for a longer distance of time than many people think. David Solomon also said that there are still many measures and efforts to be taken to improve the current state of affairs in the economic space.
Brian Moynihan, during his speech in New York, also paid attention to the new rules regarding the capital requirements of creditors that the authorities plan to introduce. Bank executives are of the opinion that the changes will restrict lending to businesses in the United States and reduce the level of competitiveness of the country. Brian Moynihan agrees with these concerns. According to him, the potential forms of impact of the new rules are of worry. He also stated that regulators should be provided with an explanation of the main provisions of the regulatory framework.
In early September, Jamie Dimon, Chairman of the Board and Chief Executive Officer of JPMorgan Chase & Co, negatively criticized the tightening of capital management rules. According to him, appropriate measures can become an obstacle to economic growth. He also stated that a higher level of transparency should be ensured in decision-making by regulators, noting the importance of fairness and openness.
Brian Moynihan, during a speech at the Economic Club of New York, devoted part of his speech to the state of capital markets. He noted the potential of initial public offers (IPOs) and buyouts. Brian Moynihan also stated the importance of stability to ensure the overall flow of activities.