Money is coming out of customer accounts and consumer spending has “leveled out,” which he sees as positive news indicating that the economy has normalized, Moynihan said while speaking at the Goldman Sachs U.S. Financial Services Conference, Bloomberg reported Tuesday.
This observation aligns with economists’ view that spending is holding up enough to avert a recession even as recent data points that show U.S. consumers pulling back on spending, particularly for big-ticket items, due to lingering inflation and elevated borrowing cost, according to the report.
Much of the outlook depends on the job market, which has been cooling in recent months, the report said.
Moynihan emphasized the need for caution in the Federal Reserve’s approach to fighting inflation by raising interest rates, stating that they should be careful not to raise rates too much at this time, per the report.
New data released Tuesday by the U.S. Labor Department showed job openings at their lowest level in more than two years.
The department’s Job Openings and Labor Turnover Survey (JOLTS) shows that the number of vacancies for every unemployed person in October was at the lowest level since August 2021.
In addition to discussing the state of the economy, Moynihan also provided insights into Bank of America’s sales and trading unit, according to the report. He stated that the unit is on track to have a strong fourth quarter, with expectations of being up in the low single digits. Moynihan attributed this positive performance to the team’s efforts and highlighted the bank’s focus on the middle market, where they continue to see more activity.
Bank of America is expecting around $1 billion in fees in the fourth quarter, which would put the firm down by the low single digits, the report said.
However, Moynihan believes that this performance would still outperform the industry as the bank gains market share, per the report. He expressed confidence in the bank’s deal pipeline, stating that it remains “very full.”