Bank of America CEO Brian Moynihan said on Tuesday that the American economy would reach a technical recession by the third quarter.
Moynihan made his remarks during the Financial Review’s Business Summit, adding that an American recession would probably not be deep and the bank forecast interest rates should start falling by the second quarter of 2024.
He also said that the bank is expecting three quarter of negative American growth led by a slowdown, while the consumer sector should be in good shape.
“Our base projection is for a recession to occur in the U.S. economy beginning in the third quarter of 2023, occur through the fourth quarter of 2023 and into the first quarter of 2024,” he said.
Moynihan said the bank has predicted the quarterly contraction to range from 0.5 percent to 1 percent. However, he said that it will be a slight recession and that consumers should not feel a deep recession.
“In our view that is based on a corporate side or a commercial side slowdown, not a consumer side slowdown,” he said. Moynihan also said that the bank should start reducing interest rates in the second quarter of 2024.
“I think you’re going to see a slowdown which frankly a lot of people are not going to see that much of. It will be more of a technical recession than it will be a deep drop in the U.S.” he said.