Bank of America Chief Executive Officer Brian Moynihan believes that U.S. consumers continue to remain in a strong position even as the Federal Reserve extends its strict monetary policy due to inflation, especially as their wages continue to grow. Moynihan delivered his assessment while attending the World Economic Forum’s annual meeting at Davos in Switzerland.
The consumers are spending, their wages are growing and frankly, there’s still a lot of stimulus … Social Security payments are going up at a high rate,” Moynihan said of the current wage climate. “Things like that are going to add more fuel that they can use to spend.”
By Moynihan’s assessment, this strong position could endure even as forecasts indicate that the U.S. economy may enter into a mild recession sometime in the later stages of 2023 or next year. In an effort to prepare themselves for this possible scenario, major U.S. banks have begun stockpiling their rainy-day funds in order to ensure that they have enough reserves to weather the storm.
The BoA CEO has warned, however, that it may be premature to rely on forecasts given that the uncertain direction of the economy and higher rate increases are resulting in unforeseeable income growth.