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Bank execs ‘cautious’ heading into 2024
Bank executives had a cautious tone while speaking at the Goldman Sachs US Financial Services Conference in Manhattan on Tuesday.
As Yahoo Finance’s David Hollerith reports:
Executives from some of the country’s biggest banks noted the resilience of the US economy, but warned loan losses are likely to continue and urged restraint regarding 2024 outlooks.
“2023 has been an interesting year,” Goldman Sachs (GS) CEO David Solomon said. Solomon rattled off the concerns financial institutions faced this year, including a regional bank crisis in the spring, a rapid rise in interest rates, and geopolitical risks.
For the US economy, Solomon said “the chance of a soft landing is much higher,” referring to the idea the Federal Reserve could bring inflation back to its 2% target without causing a recession. Still, Solomon said it made to remain “cautious” as the firm approaches 2024.
Bank of America (BAC) CEO Brian Moynihan was firmer in his assessment of the economy, saying, “The economy has entered a soft landing. It’s set up.”
Moynihan noted the firm’s data showed consumer spending is growing at a pace of about 4%, less than half the 9% growth seen from 2021 to 2022.
“The way customers are spending their money is leveled out,” Moynihan said. “It’s not a credit risk question. It’s just their appetite [for] credit is down.”
Bank of America anticipates the Fed will cut interest rates two or three times next year and four times in 2025.
“This will be higher for longer, but higher in the context that we sort of won the war on inflation,” Moynihan said. “We’ve got to be careful not to win it by too much right now.”
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