Bank of America CEO Brian Moynihan discussed the economic equilibrium challenges faced by American consumers, caught between rising prices and rising wages. In a CNBC interview, he highlighted the out-of-sync cycles of wage increases and price hikes affecting consumer spending trends. BofA’s research indicates a leveling off in consumer spending, aligning with the Federal Reserve’s disinflation target. Moynihan predicts rate cuts by the Fed starting later this year, aiming for an economic equilibrium by the end of 2025, with a Fed funds rate in the 3-to-3.5% range, deviating from the Fed’s 2% target rate. This adjustment period might challenge consumers and sectors like real estate and financial services but is seen as a necessary shift towards normalization after years of low rates.
This story was originally featured on Fortune.com
