Bank of America CEO Brian Moynihan has predicted that the United States will slip into a “very mild” 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 headed for a mild technical recession — defined as two consecutive quarters of negative growth — in the third quarter.
“Our baseline projection is that there will be a recession in the U.S. economy starting in the third quarter of 2023, which will occur in the fourth quarter of 2023 and into the first quarter of 2024,” Moynihan said during an appearance on The Financial Review’s Business Summit on Tuesday.
Moynihan said he expects the economy to shrink by between 0.5 percent and 1 percent each quarter, resulting in a “very mild recession in the scheme of things,” and that interest rates will fall in the second quarter of next year. begin to decline.
“I don’t think you’re going to have a deep recession,” he said.
Moynihan said the delay will be mild enough that “a lot of people won’t see that much of it.”
“It will be more of a technical recession than a deep US decline,” he said.
While many economists have been warning for months that a global recession is imminent, the International Monetary Fund (IMF) in January increased its global growth for 2023 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 director Kristalina Georgieva said the US economy appeared to be headed for a “soft landing” and narrowly slip into recession this year.
