Posted on 12/11/2022 9:31:27 AM PST by EBH
Bank of America's CEO, Brian Moynihan, said that consumer deposit balances for most cohorts the bank monitors are still up 10% year over year, but they peaked in April, and the growth of balances has slowed. However, Moynihan pointed out that this is the intention of the Federal Reserve's interest rate hikes -- to slow the economy -- and as long as most of these consumers stay employed, the chances of them spending their excess savings are relatively small.
This puts a heavy focus on the unemployment rate and what will happen in the future. After the November jobs report, the unemployment rate stayed strong at 3.7%. Currently, Moynihan as well as Marianne Lake, who is co-CEO of JPMorgan's consumer and community banking division, are only projecting unemployment to rise to around 5% or slightly more and peak there by the end of 2023 or early 2024. Lake added that this would really be a good outcome for the economy if it plays out.
Now, this doesn't mean JPMorgan and Bank of America's projections won't change. Looking at lower-income customers that have annual incomes of $50,000 or less, Lake said they still have pretty good cash buffers in terms of being able to pay their bills, much higher than pre-pandemic levels. However, Lake added that these customers are normalizing faster, which has been the case for a while now. She expects their cash buffers to get back to pre-pandemic levels toward the middle of next year, which she expects to be a very "instructive" time period.
But with unemployment still quite low, deposit balances still very healthy, and credit losses at 30-year lows, and considering that things like credit deterioration and rising unemployment will take some time to normalize, Lake and Moynihan simply aren't expecting a severe recession right now.
(Excerpt) Read more at msn.com ...
Ah, if only we could know what was going to happen in the future, we could make a ton of money in the markets.
However, no one knows.
Well, from what I understand, all “major bank execs” belong to Barryyyy Obonzo. A leftover from his “winning” his first electoon.
We have “transitory” idiots in charge of monetary policy, and marxist idiots in charge of fiscal policy. Unless and until there are stark changes in both we are headed for a long and hard landing.
Elites excluded.
Prices are starting to stabilize. We are not getting the crazy price increases at work on supplies as we have the last few years. Diesel went from 6.19 in my area in October to 5.09 this morning. All of that will help.
I predict a mild recession as long as employment stays strong.
Ask a Weatherman, like Bill Errs.
For one thing: We are already IN a Recession, and have been since the end of last summer. YOY Inflation of over 8.5 % more likely on the order of really 15%. Coupled with stagflation reducing employed people by corporations letting them go to meet financials that have dramatically changed.
Motley Fools are leftie liars and manipulators— hence their article about “coming” Recession.
We are already there and it is going to get worse under the “genius” moron unintelligible Janet Yellen who gladly Quantitative Eased with trillions of fake money— the US Stock and foreign governments markets.
We’ve been in a recession for close to two years.
A depression is what’s coming, probably by Spring 2023.
The numbers tell the story.
Food, Healthcare and Energy will continue to see inflation, while other junk we don’t need will level off. Debt will skyrocket, foreclosures will increase and unemployment will rise. I am sure the fake media will ignore it all people will think Biden is the best President since Obama.
There is a crap-ton of consumer debt and a large number of borrowers that are on the hairy edge. Once those people lose their cars and homes spending, which is what keeps the economy moving, will come to a grinding halt.
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