Eliran Assa

Financial institution of America CEO Brian Moynihan shouldn’t be fearful a few potential U.S. financial slowdown, saying the American shopper continues to be in a powerful place and may hold the economic system rising.

“The underlying shopper is doing properly and making more cash. Extra importantly, they’re spending more cash,” Moynihan instructed CNBC’s Becky Fast on Wednesday. Moynihan stated the financial institution’s shopper base has spent $2 trillion this yr, a 5.9% improve from the identical interval final yr. “The U.S. shopper continues to spend and that may hold the U.S. economic system in good condition.”

His feedback on “Squawk Field ” come amid growing fears of a recession. This has led buyers to decrease their publicity to riskier belongings resembling shares in favor of historically safer Treasurys, pushing yields decrease and miserable financial institution shares. Financial institution of America shares have dropped greater than 12% this month.

Moynihan identified that recession fears are arising because the U.S.-China commerce battle drags on whereas the European economic system slows.

The world’s two largest economies — China and the U.S. — have been engaged in a commerce battle since final yr. Each international locations have slapped tariffs on billions of {dollars} price of their items. In Europe, financial exercise has slowed to the purpose the place the European Central Financial institution has signaled extra stimulus is coming.

Nevertheless, Moynihan stated the world is “getting used” to the U.S.-China commerce battle. “And most of the people imagine that the China state of affairs, which may be very troublesome, goes to take a very long time to resolve totally.”

The commerce battle together with slower financial exercise abroad contributed to the Federal Reserve’s choice to chop charges by 25 foundation factors final month. Merchants additionally count on the Fed to chop charges once more in September, in accordance with the CME Group’s FedWatch instrument. President Donald Trump stated Tuesday he was “fascinated with ” slicing payroll taxes. And on Wednesday, he turned up the stress on the Fed by likening Chairman Jerome Powell as “a golfer who cannot putt. “

“The one factor the world cannot afford proper now’s for the U.S. to not proceed its development cycle,” Moynihan stated. “It could be the precise mistaken time for the U.S. to have an issue.”

Eliran Assa