'Shallow Recession' Ahead? Bank Of America CEO Brian Moynihan Says 'Everything Points' In That Direction

Bank of America Corp BAC CEO Brian Moynihan stated during the earnings call that everything points towards a relatively mild recession given the amount of stimulus that was paid to people and the money they have leftover.

What Happened: "Our research team continues to predict a shallow recession that will occur beginning in the quarter three of 2023," he stated during the bank's first quarter earnings call, according to a transcript published on Seeking Alpha's website.

Also Read: How to Buy Bank of America (BAC) Stock

The possibility of a recession depends a great deal on how many more rate hikes will the Federal Reserve consider.

There have been varying views on the central bank's future monetary path from its officials. While Atlanta Fed President Raphael Bostic said the central bank most likely has one more rate hike ahead, St. Louis Fed President James Bullard said the apex institution should continue hiking interest rates on the back of recent data showing inflation has remained persistent, according to Reuters.

Consumer Activity: Moynihan pointed out that total spending increases have slowed down over the course of last year, which could be a precursor to the economy slowing down a bit.

"…frankly consumers (are) being more careful in the use of the cash, because the cash in their accounts — in our accounts, especially for the lower income cohorts continues to build honestly. From peak last April, it fell down a little bit all the course of the year, and it’s built back up in the first part of this year," he said, according to the transcript.

Bank of America reported a 15% year-over-year rise in net income to $8.2 billion. Its revenue increased 13% to $26.3 billion.

Read Next: US Debt Ceiling Deadline Could Come Sooner Than Anticipated, Warn Bank Analysts