Tags: bank of america | ceo | brian moynihan | federal reserve | inflation | interest rates

BofA CEO: Fed Has Won Near-Term Inflation Battle

BofA CEO: Fed Has Won Near-Term Inflation Battle
Brian Moynihan, Chairman and CEO of Bank of America, testifies during a Senate Banking hearing on Capitol Hill in Washington, D.C. (Saul Loeb/Getty Images/2022 file photo)

Wednesday, 27 September 2023 03:48 PM EDT

The Federal Reserve has won the near-term battle against inflation, but interest rates are likely to stay higher for longer, Bank of America's CEO Brian Moynihan said Wednesday.

While consumer spending growth has slowed from a year earlier the economy is headed toward a soft landing in which it avoids a recession, Moynihan told the Economic Club of New York.

In the Fed's latest forecasts, officials continued to pencil in one more rate hike for this year, and said they expect rates to be higher for longer given a stronger-than-expected economy.

"They're winning the fight right now" against inflation, Moynihan said. "They caught up fast, but now they've got the equal, opposite problem to be careful they don't go too far" in restricting economic activity, he said.

While consumer spending is still rising, that growth has slowed from a year earlier, he said, citing the bank's data on consumption patterns.

Moynihan joined his counterparts in criticizing proposed capital rules that banking executives say would curb lending to U.S. businesses and make the nation less competitive. Industry leaders and trade associations have been unusually vocal in their opposition to the draft standards.

"The controversy is like I've never seen," said Moynihan, who was headed to Washington after giving his remarks in New York. "We're making our points clear."

On capital markets, he said "there's just a tremendous amount of activity that is sitting there," such as initial public offerings (IPOs) or buyouts once market participants become more confident about the economic outlook. But "the idea of a general flow is far away until you get some stability."

The successful IPO of Softbank-backed Arm Holdings had raised hopes of a revival in capital-raising activities, but the company's share price has fallen in recent days, briefly falling below its IPO price.

© 2024 Thomson/Reuters. All rights reserved.


StreetTalk
The Federal Reserve has won the near-term battle against inflation, but interest rates are likely to stay higher for longer, Bank of America's CEO Brian Moynihan said Wednesday.
bank of america, ceo, brian moynihan, federal reserve, inflation, interest rates
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2023-48-27
Wednesday, 27 September 2023 03:48 PM
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