BofA CEO Moynihan says US economy headed for soft landing

NEW YORK, Nov 8 (Reuters) – Bank of America (BAC.N) CEO Brian Moynihan stated on Wednesday he expects a soft landing during which the U.S. economy avoids a recession at the same time as client spending and industrial borrowing sluggish.

“Our research team is the best in the business and they have moved to the soft landing category. They have a slowdown in the economy in the middle of next year,” Moynihan stated in a wide-ranging interview on the Reuters NEXT convention.

He stated client spending has slowed to 4% to 4.5% on the financial institution in October, about part the tempo observed previous this 12 months, whilst industrial consumers don’t seem to be borrowing as a lot.

For months, Moynihan has cited wholesome client price range and spending as indications that the U.S. economy may keep away from recession. His perspectives steadily contrasted with the pessimism of {industry} friends.

Bank of America economists expect the U.S. economy will develop 2.7% this 12 months and zero.7% in 2024. In the so-called soft landing state of affairs, financial expansion slows, however stays sure.

Its economists additionally be expecting the Federal Reserve will carry rates of interest once more in December to achieve a terminal vary of five.50% to five.75%.

Moynihan stated the Federal Reserve would possibly hike another time even though it isn’t a sure bet, whilst expectancies are that charges will come down in the second one part of subsequent 12 months.

“It takes to the end of ’25 to get inflation down to the low twos level,” he stated.

Speaking about funding banking, Moynihan stated there’s a “tremendous pipeline of activity.”

He stated the financial institution is having a look to develop the workforce that goals middle-market funding banking job.

“We’re trying to push our investment banking capabilities deeper out into the market. We went from 60 people to 200 people and we’ll double up again,” Moynihan stated.

Bank of America’s buyers introduced within the very best income in additional than a decade within the 1/3 quarter, whilst its funding bankers bucked an industry-wide hunch.

The lender’s third-quarter income beat Wall Street estimates because it joined different large lenders in incomes extra on mortgage pastime bills, it reported in October.

Wall Street succession plans have come into center of attention in fresh months because the tenures of economic crisis-era leaders stretch on.

Moynihan stated the financial institution has a succession plan in position however gave no timeline.

“When I decide or the board decides that my time is up we will activate that plan,” he stated.

Morgan Stanley CEO James Gorman, who took the helm concurrently Moynihan in 2010, will hand the reins to Ted Pick on the finish of the 12 months. In 2021, Moynihan signaled he would force the company thru a 2d decade.

To view the reside broadcast of the World Stage pass to the Reuters NEXT news web page: https://www.reuters.com/international/reuters-next/

Our Standards: The Thomson Reuters Trust Principles.

Lananh Nguyen is the U.S. finance editor at Reuters in New York, main protection of U.S. banks. She joined Reuters in 2022 after reporting on Wall Street at The New York Times. Lananh spent greater than a decade at Bloomberg News in New York and London, the place she wrote widely about banking and monetary markets, and she or he in the past labored at Dow Jones Newswires/The Wall Street Journal. Lananh holds a B.A. in political science from Tufts University and an M.Sc. in finance and financial coverage from the University of London.

Saeed Azhar is a Reuters monetary journalist and a part of the U.S. banking workforce, which covers Wall Street’s largest banks. He specializes in Goldman Sachs and Bank of America, and likewise writes about regional banks. Before shifting to New York in July 2022, he led the finance workforce within the Middle East from Dubai, and likewise labored in Singapore, overlaying Southeast Asia finance.
Contact: +1-3479086341

Niket Nishant experiences on breaking news and the quarterly profits of Wall Street’s greatest banks, card firms, monetary generation upstarts and asset managers. He additionally covers the most important IPOs on U.S. exchanges, and late-stage mission capital investment along news and regulatory tendencies within the cryptocurrency {industry}. His writing seems at the finance, industry, markets and long term of cash sections of the site. He did his post-graduation from the Indian Institute of Journalism and New Media (IIJNM) in Bengaluru.