Bank of America CEO: Consumer Trends Bode Well for Economy 

Bank of America Chairman and CEO Brian Moynihan said Tuesday (Feb. 14) at the BofA Securities Financial Services Conference that the bank hears from commercial customers that they are trying to be careful, maintain margins, avoid a change in demand and be cautious in hiring.

“But most of them, honestly, when you ask them, they are saying, ‘I thought I’d be in worse condition right now, I thought I’d be facing more pressures, and things are still fine,’” Moynihan said.

Companies that operated with negative cash flow — raising equity capital and losing money — saw that stop cold because investors are no longer receptive to that. But that’s a narrow segment of the economy, Moynihan said.

Most firms across industries are seeing strong demand for their products and services. Similarly, wealthy clients are continuing to invest, Moynihan said.

Moynihan attributed this to consumers continuing to spend.

“Those consumers have money, they’re employed, they’re spending money and they have a lot of capacity to borrow,” Moynihan said. “This is what makes whatever we’re going through different — the consumer is that strong.”

Moynihan added that consumers have seen no slowdown in employment prospects, they’re maintaining the account balances they saved during the pandemic, they still have cash flow coming in and they have the capacity to borrow.

“I think all that bodes well,” Moynihan said. “Their balances are strong, their credit availability is strong and their spending activity in January actually picked up a little bit — it was right around 5% year over year across almost $400 billion of move of money from checks written, ATM cash usage, debit and credit cards, etc. That number is more consistent with a growing economy, quite frankly, than a recessionary economy.”

This presentation came on the same day that two other bank executives gave their outlooks on the economy at other events.

Goldman Sachs Chairman and CEO David Solomon said Tuesday that he and most of the CEOs he speaks with expect that the economy will have a softer-than-expected landing. Solomon attributed this to consumers’ resilience.

Wells Fargo Chief Financial Officer Mike Santomassimo, on the other hand, had a gloomy prediction for the U.S. economy. He pointed to the tight labor market, a housing and manufacturing slowdown and continued high inflation.