U.S. shoppers are “in good shape” and will maintain spending at an elevated clip, a minimum of within the close to time period, in accordance with Bank of America CEO Brian Moynihan.
“Consumers are in good shape, not overleveraged,” Moynihan, CEO of the second largest U.S. financial institution by property, told Bloomberg Tv from Davos, Switzerland.
The financial institution’s clients have checking and financial savings accounts which are nonetheless bigger than earlier than the pandemic and are spending 10% extra to this point in Might than the year-earlier interval, he mentioned.
“What’s going to slow them down? Nothing right now,” Moynihan mentioned.
The Federal Reserve is within the center of an inflation-fighting marketing campaign that has pummeled markets, particularly for previously high-flying progress shares. Concern has been mounting that inflation at multidecade highs and a central financial institution slamming the brakes on easy-money insurance policies will tip the economic system into recession. American shoppers might assist the U.S. keep away from that situation.
“The Fed has this typically very difficult thing of getting them to slow down without slowing down too much,” Moynihan mentioned. “I believe they are going to be able to manage this flow, but it’s going to be tricky.”
Amongst financial institution CEOs, Moynihan has been extra optimistic that the U.S. can dodge a recession. Earlier this month, JPMorgan Chase CEO Jamie Dimon put the percentages at 66% that the U.S. will have some type of financial slowdown.
“The odds are the following: something like, yes, they can engineer a soft landing, a third of a percent chance,” Dimon instructed Bloomberg. “Probably a third of a percent chance they can engineer a mild recession …and then there’s a chance this could be much harder than that.”