BofA’s Moynihan Says Inflation Staying But Consumers Will Spend
BofA’s Moynihan Says Inflation Staying But Consumers Will Spend
(Bloomberg) -- Bank of America Corp. Chief Executive Officer Brian Moynihan joined fellow finance-industry leaders as Morgan Stanley CEO James Gorman and Goldman Sachs Group Inc.’s John Waldron in predicting that inflation will stick around.
“Inflation is clearly not temporary,” Moynihan said in an interview Thursday on Bloomberg Television. “The Fed is starting to indicate it’s time for them to move” as the path out of the Covid-19 pandemic “is more assured,” he said.
Moynihan’s comments follow concerns voiced Wednesday by Goldman President Waldron, who said inflation is “not transitory.” Gorman said earlier Thursday that “money is a bit too free and available right now.” Recent inflation, driven in part by worker shortages and rising wages, has people worried “it’s more permanent,” and the way to deal with the issue “is to start to get to work on it,” Moynihan said.
Bank of America’s CEO also pointed to supply-chain bottlenecks, which may cause problems with purchasing goods ahead of the holidays, though it shouldn’t slow down consumer spending.
“The question is, ‘Can we get the goods in the country for them to buy?’” Moynihan said in the TV interview with Bloomberg’s David Westin. Consumers have the funds to purchase goods, though they may have to give pictures instead of tangible items as gifts, or spend more on experiences. Purchases may be pushed out if the issue continues, he said.
“We got to get the supply chain straightened out” to ensure next year is better than if the issue “persisted,” Moynihan said.
His remarks came after Charlotte, North Carolina-based Bank of America reported third-quarter earnings that beat analysts’ estimates, with results driven by record advisory fees amid a surge in mergers and acquisitions, and an increase in equity-trading revenue. Overall revenue rose as expenses were little changed from a year earlier.
Bank of America shares surged 4.5% Thursday, closing at their highest price since 2007.
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