Bank of America Corp chief executive officer Brian Moynihan stated during an interview with CNN on Tuesday that he expects a housing market slowdown over the next two years. This would largely be an effect of the recent rise in interest rates, the BoA executive continued.
“This is the toughest thing, because you have to slow down the economy, you have to slow down inflation, and the way you do that is raising interest rates,” Moynihan explained. “The intended outcome of their policies doesn’t feel good when you’re trying to buy a home.”
Even as U.S. consumers continue to feel the effects of the Federal Reserve’s repeated interest rate hikes, Moynihan remains confident that any impending recession will only be a “mild” one, explaining that he expects a strong labor market and sustained consumer spending to absorb the blow.
According to the BoA’s assessment of the situation, the Federal Reserve is expected to take around two years to suppress the effects of rising inflation, with the housing market suffering as a result. Rising rents are also expected to affect the spending power of U.S. consumers who rent homes.
