Bank of America Predicts “Slight” Recession and Interest Rates to Remain High Until 2024

Bank of America CEO Brian Moynihan recently predicted a “slight” recession this year in the United States and warned that interest rates won’t fall until sometime in 2024. This sentiment was echoed by Goldman Sachs, who raised their odds of a US recession in the next 12 months to 35%, up 10 percentage points from their previous prediction.[0] The increase in odds reflects “increased near-term uncertainty” around the economic effects of small bank stress, according to Jan Hatzius, Goldman's chief economist.

Powell’s comments last week and the recent collapse of Silicon Valley Bank and Signature Bank have added to the growing worries about a US recession.[1] Bank of America strategists led by Michael Hartnett believe the 290 global rate hikes over the past year are the “prelude to a hard landing and credit events”.

Bank of America has begun moving investment bankers into busier areas as the industry deals with a slowdown in dealmaking and capital markets.[2] The recession forecast of the US banking giant reflects the heightened near-term uncertainty regarding the economic repercussions of the small bank stress.

Moynihan commented that the slowdown would be relatively minor, to the extent that “lot of people are not going to see that much of”[3] He added that the labor market is still very tight, with businesses having “access to capital, albeit at higher costs.”[4]

Moynihan predicted an economic contraction between 0.5% and 1% every quarter, resulting in “a very slight recession in the scheme of things.”[5] He also said the Fed would have to hold interest rates at their current levels for a long time, as “the labor market is still very tight, despite what you hear about layoffs, and financial conditions are strong, so companies have access to capital, albeit at higher costs.”

Overall, the current economic outlook is uncertain as the US banking industry continues to deal with the repercussions of Silicon Valley Bank’s collapse. Although Bank of America’s forecast is for a “slight” recession, the Federal Reserve will continue to raise interest rates if economic indicators suggest it is needed. As of now, interest rates are sitting at 4.75%, the highest since 2007, and Powell’s comments have hinted that they could get even higher.[4]

0. “Goldman Sachs: Threat of recession is most important issue for equities” Insurance News Net, 6 Mar. 2023,

1. “SVB collapse: Goldman Sachs raises US recession odds following dip in bank stocks” Washington Examiner, 16 Mar. 2023,

2. “BofA Tells Rainmakers to Work on Tiny Deals During Drought” Mergers & Acquisitions, 9 Mar. 2023,

3. “Bank Of America CEO Sees U.S. Technical Recession In 3Rd Qtr” MENAFN.COM, 7 Mar. 2023,

4. “Bank of America CEO Predicts “Slight” Recession This Year” Watcher Guru, 8 Mar. 2023,

5. “Bank of America CEO predicts ‘slight’ US recession this year” Al Jazeera English, 7 Mar. 2023,

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