(Bloomberg) -- The Federal Reserve will have a tough time fighting inflation by slowing the US economy because consumers are continuing to spend, Bank of America Corp. Chief Executive Officer Brian Moynihan said.
“The consumer is the greatest benefit and the greatest trouble to the Fed,” Moynihan said Monday in an interview on CNBC.
The Charlotte, North Carolina-based bank reported earlier Monday that second-quarter net interest income surged 22% from a year earlier as the lender benefited from Fed rate hikes. Consumers continue to spend while loans, led by credit card and mortgage borrowing, are back to pre-pandemic levels. The three months ending in June marked the highest period of spending on debit cards for the bank on record, Moynihan said.
Lending across US banks has risen, the unemployment rate hovers at 3.6% and executives across major banks have cited continued strength in discretionary spending and higher account balances -- even amid surging prices for consumer staples.
“It’s a much different environment when you have the kind of fundamentals that are strong,” Moynihan said, adding that the Fed has to act to tame inflation. “The core debate right now is: Can they slow the economy down?”
Read More: BofA Reaps Benefit of Rate Rise, With Loan Revenue Climbing
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