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HomeMarketBofA CEO Moynihan Sees a Recession Coming, but Doesn't Sound Too Worried

BofA CEO Moynihan Sees a Recession Coming, but Doesn’t Sound Too Worried

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Bank of America CEO Brian Moynihan said that his bank still sees the U.S. economy heading toward a mild recession later this year, but the timing keeps getting pushed out thanks to the consistently healthy consumer. 

Like many, Bank of America (ticker: BAC) expects a recession in 2023. Its forecast is for a downturn to start later this year and last for about three quarters. The bank originally expected it to start in late 2022. The delayed recession is a result of a strong American consumer, Moynihan said.

“The general American consumer has money in their accounts, has the ability to borrow, is paying their debts, and is employed and earning more money,” he said in an interview with Barron’s Tuesday. “That means that a recession is a little hard to understand.”

But Moynihan still believes a downturn is coming. The Federal Reserve is tasked with getting inflation under control and with January’s consumer price index showing a smaller-than-expected decline in prices, the Fed will likely have to continue raising interest rates or, at the very least, hold them higher for longer. 

That will slow down consumer demand—as it already has for big-ticket items like houses and cars—but the economy is unlikely to experience a sharp drop like the one that occurred in 2008 and 2009. Rather, the economy could see a gross domestic product go slightly negative, but not severely so.

“That’s where you get the soft landing,” Moynihan said. “If it’s plus a half or minus half, that’s not much difference in terms of general economic activity. This isn’t a minus 5% or something like that.”

As the second largest bank in the U.S., Bank of America has special insight into the financial health of household and corporate clients alike. On the commercial side, the bank sees clients being a little less aggressive than they were when monetary policy is easy, but they aren’t shutting down. Hiring is happening, just at a slower pace, Moynihan noted. On the consumer side, mortgage activity predictably slowed down as rates went up but credit card usage is similar to prepandemic levels. All told the bank expects loan growth to be in the mid-single digits this year. 

As for what a downturn means for Bank of America, Moynihan is optimistic, crediting the “responsible growth” strategy the bank has employed during his 13-year tenure. 

“We can’t escape the economic environment around us so we spent decades cleaning the portfolios up, prime lending, the way we manage the market risks, the way we manage our expense base,” Moynihan said, while noting that the bank’s eight diversified business lines give them some amount of cover when certain areas of the economy are weaker. 

So far this year Bank of America shares are up 8%, roughly matching the gains in the
S&P 500
but lagging the 10% jump in the
(KBE). Analyst sentiment has cooled on the stock over the last 5 months with 54% of analysts surveyed by FactSet rating shares the equivalent of a Buy, down from 67% in September. The average price target is $40.72, implying 14% of upside from recent trading levels. 

Moynihan, meanwhile touts the company’s consistent earnings power, including more than $7 billion in profits in 2022—its third-best year ever. 

“Our job is to produce more and more earnings every year and less and less volatility, increase the dividend a little bit, buy back the shares,” Moynihan said.

And he didn’t sound too worried about being able to accomplish it.

Write to Carleton English at


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