Bank of America Chairman and CEO Brian Moynihan highlighted the “relatively strong” condition of the average American consumer and how this affects the Federal Reserve’s handling of inflation.
Bank of America CEO says Americans are struggling and the debate over whether or not the US economy is technically in recession is missing the point.
The current economic climate is having a negative impact on the people who can least afford it. Brian Moynihan said the Biden administration’s attempts to argue that the US is not technically in a recession are unhelpful.
“Recession is a word. Whether we’re in a recession or not really doesn’t matter. It’s about how it feels for the people going through it,” Moynihan said in an interview with The Associated Press.
The BofA CEO would not say the U.S. economy is in recession and said that statement must come from the National Bureau of Economic Research, the bipartisan organization that determines when recessions start and end.
BANK OF AMERICA CHIEF ECONOMIST SEEES HIGH CHANCE OF SLIGHT RECESSION THIS YEAR
Bank of America CEO Brian Moynihan said recent arguments over whether or not the US economy is technically in recession miss the point. What matters is that current economic conditions are negatively affecting those hardest hit (AP Photo/John Minchillo/AP Newsroom)
Earlier this week Michael Gapen, the head of US economic activity at Bank of America, told FOX Business that he expects the Federal Reserve’s war on inflation to unintentionally trigger a downturn this year.
“This cycle is likely to end in a slight downturn,” Gapen said. “How do I get that? It’s basically just history. It’s really hard to get a soft landing.”
Rising inflation and falling consumer confidence were negative factors, but on the upside, the monthly jobs report is still strong.
Brian Moynihan, CEO of Bank Of America, and a bank branch. (Stephen Chernin/Getty Images/Portal)
US employers unexpectedly added 528,000 jobs in July. Wage growth also accelerated, rising 0.5% in the one-month period from June.
Moynihan cited gas prices and rents as two key issues negatively impacting the average American. He said they were cause for concern.
The national average for gasoline per gallon rose to just over $5 in June before falling back below $4 last week.
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Moynihan told the AP rents were a bigger problem.
A customer uses an automated teller machine (ATM) at a Bank of America bank branch in San Francisco. (David Paul Morris/Bloomberg via Getty Images/Getty Images)
“Gas prices are falling again, but rents are up 10, 12, 15%. And rents can end up eating up 40% of those households’ incomes,” Moynihan said.
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Moynihan still believes that the American consumer is still in good shape and can withstand the economic turmoil.
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Moynihan said companies continue to raise wages, which is helping Americans cope.
The Associated Press contributed to this report.