BofA CEO wary of ‘emotional’ hit
But has bright forecast for U.S., despite politics
The head of Bank of America said the U.S. economy remains on stable financial footing, but warned of the dangers of an emotional reaction to the political landscape. “The question is what is on our minds, that’s what’s going to be what stops a consumer from spending,” said Brian Moynihan, president and chief executive of Bank of America, speaking at the Boston College Chief Executives Club yesterday. “Not a financial impact ... but an emotional impact, that’s what we’ve got to watch the next few months.” Moynihan said the economy continues to show signs of growth in fundamental areas, regardless of politics. He said Bank of America has not changed its economic outlook following the midterm elections. “The world ebbs and flows, and in the end of day what’s going on now is consumers are spending, and what’s going on now is unemployment is in good shape, wages are growing and that’s what drives the U.S. economy,” he said. “Are there other things you can think about, talk about? Absolutely, but the reality is that’s what's going on as we speak, and I don’t think it changed our team’s opinion at all.” Democratic control of the House of Representatives likely means Rep. Maxine Waters (D-Calif.) will take charge of the powerful Financial Services committee. Waters is seen as being less friendly toward banks and the finance industry compared to Republican committee leadership. Yesterday, Moynihan dismissed speculation that it would be difficult for the industry to work with her. “I’ve got a 30-year personal history working with both sides of the aisle, and it’ll work through, we’ll be fine,” he said. “We’ll find out what it’s going to be like, but I’m confident that everybody has the best interests of America (in mind).” Also yesterday, Federal Reserve officials held a key interest rate steady and appeared to stay on course for another hike next month. They said that U.S. economic activity “has been rising at a strong rate,” the labor market continues to strengthen and household spending is growing strongly. But they added a new note of caution. Fixed business investment “has moderated from its rapid pace earlier in the year,” the statement said. In recent months, Fed statements have noted that spending was growing “strongly.”