Bank of America CEO Brian Moynihan has predicted that the United States will experience a mild recession later this year, despite positive signs for the global economy. Speaking at a business summit in Sydney, Australia, Moynihan stated that the US economy is expected to experience a technical recession – defined as two consecutive quarters of negative growth – in the third quarter.
Moynihan projected that the recession would last from the third quarter of 2023 through the first quarter of 2024, with each quarter seeing a contraction of between 0.5 percent and 1 percent. He emphasized that the recession would be “very slight” in the grand scheme of things and that interest rates would begin to fall in the second quarter of next year. He also stated that he did not expect to see a deep recession.
Moynihan noted that the slowdown would be mild enough that many people would not notice it. He characterized it as more of a technical recession than a significant drop in the US economy. While many economists have warned of an impending global recession, the International Monetary Fund (IMF) raised its 2023 global growth projection from 2.7 percent to 2.9 percent in January, citing strong demand in the US and Europe, as well as China’s reopening after strict lockdowns and border controls.
Last month, IMF Managing Director Kristalina Georgieva stated that the US economy appeared to be headed for a “soft landing” and would narrowly avoid a recession this year.