Bank of America’s Chief Financial Officer, Alastair Borthwick, offered an optimistic view on the US economy during the company’s annual financial CEO conference on Wednesday. He stated that the threat of a recession is receding, primarily due to robust consumer spending.
Borthwick highlighted a year-over-year increase in consumer spending by 4%, which he believes makes it challenging to predict an impending US recession. He added that the consistent expenditure on goods and travel by US consumers, evident in high levels of credit and debit card payments, reinforces this view. Moreover, he emphasized that the quality of consumer assets remains strong.
In addition to these observations about consumer behavior, Borthwick shared that Bank of America’s economists have postponed their predictions of a potential recession. This decision mirrors a broader trend among Federal Reserve economists who have also ceased forecasting a recession. A few weeks prior, Bank of America became the first major Wall Street bank to formally retract its recession forecast, reflecting an increasingly positive economic outlook.
On another note, Borthwick confirmed the bank’s forecast for net interest income for the third quarter. Net interest income is the revenue derived from loan payments minus what is paid to depositors. Bank of America anticipates this figure to be in the range of $14.2 billion to $14.3 billion.
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