Bank of America CEO Brian Moynihan announced that the financial institution no longer foresees a recession in the near future for the U.S. economy. In a discussion on CBS’s “Face the Nation” with Margaret Brennan, Moynihan suggested that the Biden administration and the Federal Reserve have successfully navigated the challenges posed by recent inflation, achieving a “soft landing.”

Moynihan acknowledged that while the economy is slowing down, consumer spending is still consistent with levels seen before the pandemic. “Our team is a great team at Bank of America Research; [it] does not have any recession predicted anymore,” Moynihan stated. “Last year, this time, it was a recession.”

He noted that the current consumer spending rate is around 3 percent, which is approximately half of last year’s rate. Although consumers are feeling the impact of high interest rates, Moynihan pointed out that there are still positive indicators. “The consumer has slowed down. They have money in their accounts, but they’re depleting a little bit,” he said. “They’re employed, they’re earning money, but if you look at — they’ve really slowed down. So the Fed is in a position they have to be careful that they don’t slow down too much.”

Looking ahead, Bank of America predicts that the Federal Reserve will implement two interest rate cuts this year—one potentially in the upcoming month and another in December. Moynihan also indicated that the bank expects four additional rate cuts in 2025. This prediction comes after the Fed decided against cutting rates during its July meeting, despite market expectations.

“So we’re getting back to normal, and that’s going to take a while for people to adjust to,” Moynihan remarked, referencing the anticipated rate cuts. “Both on the corporate side and commercial side and on the consumer side.”

Last week’s weak jobs report and the absence of a rate cut initially caused a dip in American markets, though they have mostly recovered since. Additionally, mortgage rates have seen a sharp decline in recent weeks as lenders anticipate forthcoming Fed rate cuts.

(YWN World Headquarters – NYC)