New York
CNN Business
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The CEO of some of the country’s biggest banks is getting ready for an financial downturn in 2023. But he’s additionally hopeful that the most probably recession will probably be transient and “mild.”
Bank of America
(BAC) CEO Brian Moynihan mentioned in an unique interview with Poppy Harlow on “CNN This Morning” Tuesday that there’s numerous uncertainty within the world economic system because of the prospective US freight railroad strike, Russia’s warfare with Ukraine and Covid shutdowns in China.
So an financial pullback shouldn’t be a big marvel. But Moynihan advised Harlow that the worst-case fears for the economic system won’t materialize — because of the continuing resilience of American consumers.
“That was predicted to happen earlier this year. There was going to be a real slowdown,” Moynihan mentioned. “The Fed was going to raise rates and it’s all pushed out largely because of the US consumer.”
Moynihan’s feedback in regards to the economic system are decidedly extra bullish than a few of his friends.
JPMorgan Chase
(JPM) CEO Jamie Dimon mentioned previous this summer season that Americans must brace for an financial “hurricane.” And Goldman Sachs
(GS) CEO David Solomon advised Harlow in July that there’s a “good chance” the United States has but to succeed in height inflation.
Still, Moynihan is worried that there might be extra difficult occasions forward for the housing marketplace. Mortgage charges have skyrocketed this 12 months because of the Federal Reserve’s sequence of competitive rate of interest hikes. That has made it tough — if now not not possible — for lots of more youthful Americans to shop for a primary house.
“This is the toughest thing. You have to slow down the economy. You have to slow down inflation. And the way you do that is raising interest rates,” Moynihan mentioned. “The intended outcome of [the Fed’s] policies doesn’t feel good when you are trying to buy a home.”
Moynihan advised Harlow that there might be two years of ache within the housing marketplace earlier than task returns to customary.
But in spite of worries in regards to the housing marketplace, Moynihan mentioned he’s nonetheless positive that the United States economic system will proceed to steer the worldwide restoration, particularly given considerations about China’s fresh Covid outbreak and the intensifying protests over the rustic’s strict lockdown insurance policies.
“I think our economy is holding on better than the rest of the world,” he mentioned.
