© Reuters. FILE PHOTO: Bank of America Chairman and CEO Brian Moynihan testifies before a Senate hearing on Banking, Housing and Urban Affairs on “Annual Oversight of the Nation’s Largest Banks,” on Capitol Hill in Washington, USA, September 22, 2022. REUTERS/Evelyn
SYDNEY (Reuters) – Bank of America (NYSE:) Chief Executive Brian Moynihan said on Tuesday the US economy would hit a technical recession starting in the third quarter.
Moynihan told The Financial Review Business Summit in Sydney that the US recession would not be deep and that the bank had forecast interest rates to start falling in the second quarter of 2024.
The bank expects three-quarters of negative growth in the US led by a corporate slowdown, with the consumer sector in good shape, he said.
“Our baseline projection is for a recession to occur in the US economy beginning in the third quarter of 2023, through the fourth quarter of 2023, and through the first quarter of 2024,” Moynihan said.
The bank, he said, forecast quarterly contractions to range between 0.5% and 1%.
“It’s a very mild recession in the scheme of things. I don’t think we’ll see a deep recession,” he said.
“In our view, that’s based on a slowdown on the corporate or business side, not a slowdown on the consumer side.”
Moynihan said the bank forecast that US interest rates would start to come down in the second quarter of 2024.
“It’s a very mild recession in the scheme of things. I don’t think we’re going to see a deep recession,” Moynihan said.
“I think you will see a slowdown that frankly a lot of people won’t see very much. It will be more of a technical recession than a deep dip in the US.”
