WHEN: Today, Monday, June 12, 2023
WHERE: CNBC’s “The Exchange”
Following are excerpts from the unofficial transcript of a CNBC exclusive interview with Bank of America Chair & CEO Brian Moynihan on CNBC’s “The Exchange” (M-F, 1PM-2PM ET) today, Monday, June 12. Following is a link to video on CNBC.com:
All references must be sourced to CNBC.
MOYNIHAN ON ECONOMY SLOWING DOWN AND RECESSION
BRIAN MOYNIHAN: I think, at the end of the day, we have a recession predicted for starting the third quarter, fourth quarter and the first quarter of next year. It’s a mild recession and that’s largely because the amount of stimulus that was put into the economy in connection with the pandemic both fiscal and monetarily. Rates were held low for a good period of time. We’re only adjusting that out of the system.
MOYNIHAN: The economy is slowing down. They’re guiding it down. Will it be a soft landing. Our economists think it will be a recession but a mild recession and unemployment moves up in mid-fours and that used to be full employment honestly it’s not quite the disruptive thing.
MOYNIHAN ON CREDIT LINES FLATTENING OUT
MOYNIHAN: What’s been a little more interesting is the economy has clearly slowed down. You’ve seen in the middle market space in the, you know, mid-sized companies up to 2 billion in revenue all the way down to, you know, 10 to 15 million in revenue. You’re seeing their line usage meaning the usage of their lines of credit basically flatten out. It was still about 10% or 15% below where it was pre-pandemic and it had fallen much more than that, it had gotten to that level and now it sort of flattened out which means they don’t have as much to do with the money.
MOYNIHAN ON FED AND INFLATION
MOYNIHAN: The Fed’s decision on rates is a good view of whether they’re taming inflation so they needed to tame inflation and that was a serious issue. If you look at what’s happened, you see inflation tip over and start to come down. It’s not over. It’s still high relative to the long-term target of 2.
MOYNIHAN: We have $1.9 trillion of deposits and $1 trillion of loans and we have other cash on top of that that we have to put to work so the idea of paying, you know, 5% percent for money we’re going to just hand back to the Fed doesn’t make a lot of sense. So we put our clients into the market to achieve those returns and we raise deposit money for other institutions frankly.
MOYNIHAN ON OFFICE SPACE
MOYNIHAN: What you’re seeing now is frankly the move is repopulating the office space fairly — there will still be more hybrid and more flexibility probably there was in the current policy before at our company and other companies, but you’re seeing that collaboration.
