The CEO of Bank of America stated that everything in the economy points to a mild recession. The Federal Reserve has hiked interest rates nine times over the past year as it tries to control inflation of a kind the country has not witnessed in 40 years. Despite this, due to the stimulus given to the economy, the country will head to a mild recession.
The Bank of America predicts an annualized GDP contraction of 0.5% to 1%. It expects positive growth in the year 2024. Moynihan pointed out that unemployment rates were more than 3.5% and that the wages were tipping over. This according to him will lead to inflation tipping down. It is on the basis of this analysis that he believes that the recession will be mild.
Other sections of Wall Street are being more cautious in their speculation with Federal Reserve continuing to hike interest rates.
The Black Rock CEO Larry Fink was positive. He pointed to the three stimulus bills, the Infrastructure Bill, the Chips and Science act, and the Inflation Reduction act. According to him, these three bills will provide the economy with trillions of dollars in stimulus leading to more jobs and growth.
