SYDNEY, March 7 (Reuters) – Bank of America (BAC.N) Chief Executive Officer Brian Moynihan said on Tuesday that the US economy will enter a technical recession from the third quarter.
Moynihan told The Financial Review’s Business Summit in Sydney that the US recession would not be deep and that interest rates predicted by the bank would begin to fall in the second quarter of 2024.
The bank expects three quarters of negative growth in the US, led by a business slowdown, with the consumer sector in good shape, he said.
“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.
The bank, he said, predicted quarterly contractions to be between 0.5% and 1%.
“It’s a very mild recession in the scheme of things. I don’t think you’re going to see a deep recession,” he said.
“In our view, that’s based on a business or commercial slowdown, not a consumer slowdown.”
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Moynihan said the bank predicted U.S. interest rates would begin to fall in the second quarter of 2024.
“It’s a very small recession in the scheme of things. I don’t think you’re going to see a deep recession,” Moynihan said.
“I think you’re going to see a slowdown that quite frankly a lot of people aren’t going to see much of. It’s going to be more of a technical recession than a deep US drop.”
Reporting by Praveen Menon and Lewis Jackson in Sydney; writing by Scott Murdoch; Edited by Chris Reese and Richard Chang
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