Economy

Bank of America’s CEO says economic growth is ‘better than people think’ and the Fed should stay on hold

Bank of America CEO Brian Moynihan: The economy ought to be holding up better than people think

Bank of America CEO Brian Moynihan said Wednesday that consumers are continuing to spend and economic growth should be solid though slower this year.

Despite surveys indicating that confidence is at a nearly three-year low amid increasing worries about inflation, Moynihan told CNBC that spending data shows consumers are still shelling out money, though shifting away from goods and into services.

“We’re in this classic moment … where the consumer is saying, ‘I’m getting more pessimistic,’ in some of the surveys and things like that,” he said during a “Squawk Box” interview. “But if you actually look what they’re doing day to day, they continue to spend, which means the economy ought to be holding up better than people think.”

From a numbers standpoint, that means gross domestic product growth this year of closer to 2% from recent trends closer to 3%, according to the banking chief. Some of the slowdown will come from President Donald Trump’s tariffs, which Moynihan estimated will cut about 0.4 percentage point off growth in the near term before the economy adjusts.

However, he called the 2% level “trend growth. That’s what we’ve all been trying to get to for 10 or 15 years after the financial crisis.”

“We see the consumer continue to be solid, and that should bode well for the economy,” Moynihan added. “There’s a lot of questions out there, and I think that will sort through. But right now, we’re not talking about what could happen, we’re talking about is happening. The consumer continues to spend pretty strongly for the first part of this year.”

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