We’ve all braced for the economic downturn for months, and as problems heat up, more and more business professionals are weighing in. One of the more recent voices to chime in is Brian Moynihan, CEO of Bank of America. Being one of the nation’s largest banks, BOFA is no stranger to seeing the effects that recessions can have on their users.
Many wonder what the consequences are for banks that are hit by recessions. Changes to the financial system can be challenging, and bankers do have to consider several factors to reduce negative impacts. Banks are held to much higher standards now, as opposed to previous recessions.
In an interview with CNN’s Poppy Harlow, Moynihan affirmed the fears many have about the uncertainty of what’s to come, but surprisingly, had a positive outlook. He mentioned COVID, the Russo-Ukrainian war, and the US railroad strike as negative factors in the state of the global economy, stating that pullback should not come as a surprise.
Leaning into the good news, though, he told Harlow that worst-case scenarios likely aren’t on the horizon, thanks to the noted resilience of America’s shoppers. He continued to say that the worst of it was predicted to happen earlier this year, mentioning the previous possibility of a major slowdown and Fed rates on the rise. Moynihan noted that most of what was predicted was pushed out by American consumers, but keep in mind that his opinion does conflict with that of some of his peers.
CEO of JPMorgan, Jamie Dimon, exclaimed this summer that Americans should brace for harsh weather in the economy, while others have predicted that the US hasn’t reached the peak of inflation yet. Moynihan is, however, concerned about the housing market. Mortgage rates are high, making it nearly impossible for many young Americans to buy their first home. He stated that the element of it all is the toughest because in order to slow down the economy, you have to raise interest rates. Moynihan sympathized with young adults who are struggling with home buying.