Bank of America is predicting a mild recession will happen during the last two quarters of 2023. Brian Moynihan, CEO of Bank of America stated that this recession will be the consequence of the U.S. Federal Reserve tightening actions in order to fight inflation, and how this will increase unemployment to 4%.
Bank of America CEO Predicts Mild Recession
Bank of America is still predicting a mild recession in the U.S. economy that will happen later this year. In a recent interview on CBS “Face the Nation,” Brian Moynihan, Bank of America CEO discussed this new prediction and the reasons behind it.
When asked about Bank of America’s forecast for the U.S. economy, Moynihan stated:
So the last time I was here was it was the end of, uh, last year and we predicted a recession this year. We moved it out. It’s basically third quarter this year, fourth quarter, this year into first quarter, a mild recession.
Moynihan explained this recession will be the effect of the tightening action of the U.S. Federal Reserve, which has been increasing interest rates to bring down inflation. Moynihan also stated that unemployment was poised to rise to 4% as a result of these measures and that according to their data, consumer spending was slowing down.
Moynihan’s statements are in line with what the U.S. Federal Reserve has predicted, having stated in April that the U.S. economy will take a hit later this year. Renowned economists like Peter Schiff have been predicting a more dire outcome, stating that the U.S. is probably heading to a depression worse than the one faced by Americans during the 30s.
Hiring Slowdown
Moynihan also stated that the bank had slowed down its hiring processes and that he has gotten the same input when talking to other companies who were also doing the same thing.
When asked about hiring slowdowns, Moynihan answered:
Last may. We hired 3,000 people. This May, we hired 700 people and that’s due the attrition rate has slowed so much and we need to trim ahead to count. So we’ll be down 3000 F-T this quarter. We don’t, we’re not making layoffs.
A recent Bank of America survey revealed that its customers were preparing for a possible recession, seeking refuge in cash and abandoning other investment instruments at the same time.
What do you think about Bank of America’s predictions for the U.S. economy? Tell us in the comment section below.
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