Monday 16 September 2019

US recession risks are low - BofA chief

Bank of America CEO Brian Moynihan. Photo: Getty Images
Bank of America CEO Brian Moynihan. Photo: Getty Images

Katherine Chiglinsky and Jenny Surane

Bank of America chief executive Brian Moynihan believes this week's bond market turmoil has been driven by issues outside the US and that recession risks are low in the country as consumer spending remains strong.

"We have nothing to fear about a recession right now except for the fear of recession," Moynihan said in an interview Friday.

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Bond markets have been signalling rising recession risks, with a closely-watched portion of the Treasury yield curve inverting this week for the first time since 2007. Questions about the state of the economy and trade tensions have put pressure on bank stocks too, with the KBW Bank Index falling 12pc since the end of July.

Yields on US Treasuries have been dropping, with the benchmark 10-year bond falling below 1.5pc on Thursday for the first time since 2016.

Moynihan attributed the issues to slowing economic growth in Europe and China and businesses having to rework their supply chains to account for the threat of increased tariffs.

Bloomberg

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