Bank of America CEO Brian Moynihan is reportedly optimistic about the U.S. economy and the bank’s growth prospects.
Speaking Wednesday (Nov. 8) at the Reuters NEXT conference, Moynihan said he believes that the economy will experience a soft landing rather than a recession, with a slowdown expected in the middle of next year, Reuters reported Wednesday.
Moynihan emphasized the slowdown in consumer spending and commercial borrowing as indicators of the current economic climate, according to the report. Despite these trends, he remains confident in the overall health of consumer finances and spending, which he believes will help the U.S. economy avoid a recession.
Bank of America’s economists predict that the U.S. economy will grow by 2.7% this year and 0.7% in 2024, the report said.
They also expect the Federal Reserve to raise interest rates again in December, with a projected terminal range of 5.5% to 5.75%, per the report. However, Moynihan mentioned that there is a possibility of one more rate hike, and expectations are that rates will come down in the second half of next year.
In terms of investment banking, Moynihan expressed excitement about the bank’s plans to expand its team targeting middle-market investment banking activity, according to the report. The bank has already increased the team from 60 people to 200 people and plans to double it again. Bank of America’s traders had their highest revenue in over a decade in the third quarter, and its investment bankers performed well despite an industry-wide slump.
Moynihan also addressed the topic of succession planning at Bank of America, stating that there is a plan in place for when his time as CEO is up, per the report. While he did not provide a specific timeline, this is noteworthy as Wall Street succession plans have been in focus recently.
Goldman Sachs CEO David Solomon said on Sept. 12 that the chance of a relatively soft landing for the economy has increased over the past year, but inflation may be more persistent than expected. While uncertainties remain, Solomon said he was optimistic about the U.S. economy’s ability to avoid a recession. He also pointed to the reopening of capital markets, with significant initial public offerings (IPOs) taking place.