Bank of America CEO predicts ‘slight’ US recession this year

Bank of America Chief Executive Brian Moynihan smiles during an interview.
Bank of America Chief Executive Brian Moynihan has said he expects a "very slight" recession for the US economy in 2023 [File: Bobby Yip/Reuters]

Bank of America chief executive Brian Moynihan has predicted the United States will enter a “very slight” recession later this year despite improving signs for the global economy.

Speaking at a business summit in Sydney, Australia, Moynihan said the US economy is on track for a mild technical recession — defined as two consecutive quarters of negative growth — in the third quarter.

“Our base projection is for a recession to occur in the US economy beginning in the third quarter of 2023, occur through the fourth quarter of 2023 and into the first quarter of 2024,” Moynihan said during an appearance at The Financial Review’s Business Summit on Tuesday.

Moynihan said he anticipates the economy to contract in each quarter by between 0.5 percent and 1 percent, resulting in a “very slight recession in the scheme of things,” and for interest rates to start falling in the second quarter of next year.

“I don’t think you’ll see a deep recession,” he said.

Moynihan said the slowdown will be mild enough that a “lot of people are not going to see that much of” it.

“It will be more of a technical recession than it will be a deep drop in the US,” he said.

While many economists have warned for months that a global recession could be on the way, the International Monetary Fund (IMF) in January raised its 2023 global growth from 2.7 percent to 2.9 percent, citing “surprisingly resilient” demand in the US and Europe, and the reopening of China’s economy after strict lockdowns and border controls.

Last month, IMF Managing Director Kristalina Georgieva said the US economy appeared to be on track for a “soft landing” and would narrowly avoid falling into recession this year.

Source: Al Jazeera and news agencies