Bank of America CEO downplays recession fears, cites economic strength and AI-driven growth

Bank of America CEO Brian Moynihan wants you to stop worrying about a recession. His argument: the very thing people are panicking about, higher interest rates, is actually proof the economy is doing fine.

Speaking on July 1, Moynihan framed the current rate environment as a natural byproduct of economic strength and the Federal Reserve’s ongoing effort to tame inflation. The federal funds rate currently sits at 3.5-3.75%, and Bank of America is forecasting three more rate hikes ahead.

The numbers behind the optimism

Bank of America projects US GDP growth of 2.4% for 2026, a step up from the roughly 2% pace seen in 2025. Part of that acceleration, according to Moynihan, comes from productivity gains tied to artificial intelligence.

The bank has completely abandoned recession predictions. Not hedged them, not softened them. Dropped them entirely.

Moynihan pointed to consumer spending as his primary evidence. People are still buying goods and services at a robust clip, and he argued that actual spending behavior matters far more than sentiment surveys, which have been painting a gloomier picture around affordability concerns.

Moynihan flagged global conflicts and the possibility of consumer spending slowdowns as genuine risks for 2026, but was clear that he sees no current evidence of those slowdowns materializing.

Three rate hikes and what they mean

The forecast of three additional rate hikes is notable because it runs counter to the market’s general hope that the tightening cycle would ease. If Bank of America is right, borrowing costs for mortgages, auto loans, and business credit will continue climbing.

A 2.4% GDP growth rate in a rising rate environment would be genuinely impressive by historical standards. The US economy has averaged roughly 2% annual growth over the past decade, and that was in a period that included near-zero interest rates for years.

The $6 trillion stablecoin question

Bank of America appointed a Global Head of Digital Asset Transformation in 2026. Moynihan acknowledged that pending stablecoin legislation could potentially redirect up to $6 trillion in bank deposits toward digital assets.

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