Dem Iran-Krieg und hohen Preisen zum Trotz: «Dem amerikanischen Konsumenten geht es gut», sagt der Chef der Bank of America

Bank of America's CEO Brian Moynihan criticizes the U.S. government's intervention in the bond market. Nonetheless, he believes that as long as the economy continues to grow, budget deficits and interest rates will not be a problem. The U.S. has not found a solution to the accelerating growth of its debt. U.S. Treasury Secretary Scott Besseman took an unusual step by doubling back-to-back purchases of long-term government bonds.

However, this only temporarily reduced the yields on such debt. Financial industry experts harshly criticized Besseman's move, including Bank of America CEO Brian Moynihan, who stated that bond financing should remain in the hands of the market. He noted that there are enough large holders of U.S. government securities, such as Bank of America itself, which is the second-largest bank in the U.S. with a balance sheet of $3.5 trillion.

The CEO of Bank of America has been with the company for 16 years and wanted to ease the situation on the bond market. His action was aimed at reducing the country's debt burden, which requires the U.S. to spend more than $1 trillion annually to pay its debt interest. The budget deficit, currently over 6% of the country's economic output, is a pressing issue, according to Moynihan.

He emphasized that it is a serious matter, but it cannot be solved today. The issue will continue to be relevant for the next ten years. Moynihan tempered the problem by saying that as long as the economy grows, it will be easier to bring the deficit to an appropriate level. He believes that the U.S. economy will grow around 2.4% annually, adjusted for inflation, and will continue to do so in the coming year.

Additionally, the labor market is strong, and wages have increased for people with low incomes. Moynihan attributes the resilience of the American economy to the overwhelming private consumption in the country. "Consumer spending in the United States is as large as the entire economy of China," he said. This acts as a stabilizing force amidst market fluctuations.

Moynihan also addressed the impact of the Iran war, noting that while many American consumers complain about higher living costs, such as food, fuel, or rent, they are not negatively affected as these expenses only account for 2-3% of monthly household expenditures. He pointed out that higher fuel prices affect consumers to varying degrees, but they are not delighted, even though the expenses represent only a small portion of their monthly budgets.

According to Moynihan, there will be no negative impact on American consumers' spending behavior. The figures confirm his statement: In July, private consumption grew more than expected by 0.2%, despite a 3.7% inflation rate in the same month. Although the inflation rate remained unchanged compared to the previous month, the rate of increase is still far from the 2% target set by the central bank.

Bank of America has around 69 million customers and operates 3,700 branches in 39 states. Moynihan understands the situation of American consumers and what they spend their money on. Bank of America is the largest universal bank in the country, with around $1.2 trillion in retail deposits and wealth management assets. Each consumer perceives their purchasing power differently, but Moynihan emphasizes the importance of how people behave.

"Many consumers feel that fuel and rent prices are high," he said. However, in July, Bank of America's private customers spent 5% more than a year earlier. This spending goes beyond everyday necessities and includes leisure activities like dining out, cruises, or flights. The creditworthiness of Americans has not worsened. "On the contrary, defaults on loans have decreased," Moynihan noted.

American consumers have seen their real estate values increase over the years, and loan-to-value ratios have decreased. According to Moynihan, American consumers are perceiving higher prices in the short term, but financially, they are resilient. "The Americans are paying their bills. The consumers are doing well," Moynihan concluded.

It remains to be seen if the latent inflation will force the U.S. central bank chief Kevin Warsh to raise interest rates this year. Even then, according to Moynihan, it would not have a significant impact on the overall U.S. economic development. "The short-term interest rate structure affects consumers not so strongly as many think," he said.

Consumers would resort to high-interest credit cards, auto loans would last between three and seven years, and mortgages would align with seven- to ten-year U.S. government bonds. However, when consumers feel the impact of interest rate adjustments, it is mainly the businesses that are affected. "Changes in the interest rate target primarily impact small and medium-sized enterprises, as they directly face higher borrowing costs," Moynihan explained.