Bank Of America CEO Expects US Economy To Hit Technical Recession From Q3

Bank of America Chief Executive Officer Brian Moynihan reportedly stated on Tuesday the U.S. economy would hit a technical recession beginning in the third quarter.

A U.S. recession would not be deep and the bank estimates that interest rates would start falling in the second quarter of 2024, Moynihan told The Financial Review’s Business Summit, according to a Reuters report.

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Expectations: He said that Bank of America expects three-quarters of negative U.S. growth led by a corporate slowdown, with the consumer sector remaining upbeat.

“Our base projection is for a recession to occur in the U.S. economy beginning in the third quarter of 2023, occur through the fourth quarter of 2023, and into the first quarter of 2024,” Moynihan said.

The bank, he stated, projects that quarterly contractions would range between 0.5% and 1%. “It’s a very slight recession in the scheme of things. I don’t think you’ll see a deep recession,” he said.

Investors and traders are keenly watching out for Federal Reserve Chair Jerome Powell's testimony before Congress on Tuesday and Wednesday. The SPDR S&P 500 ETF Trust SPY closed 0.069% higher on Monday while the Invesco QQQ Trust Series 1 QQQ gained 0.11%.

“I think you’re going to see a slowdown which frankly a lot of people are not going to see that much of. It will be more of a technical recession than it will be a deep drop in the U.S.,” Moynihan said.

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