Bank of America CEO on the consumer: Starting to see more convergence in spending patterns

Summary

Bank of America CEO Brian Moynihan discusses the state of the US consumer, noting resilient spending and convergence across income groups. He addresses affordability concerns, oil price uncertainty, and BofA's forecast for three Fed rate hikes this year. He also comments on AI data center financing, asserting that high returns will insulate the sector from higher short-term rates.

• Consumer spending up 5% y/y, with lower-income wage growth accelerating and spending patterns converging.
• Travel, cruises, and entertainment spending remain notably strong.
• Affordability crisis persists mainly due to housing and rent costs, but actual spending behavior remains robust.
• Oil prices remain uncertain, with a wide range of $60-$100, pending geopolitical resolution.
• BofA research predicts three Fed rate hikes in Sept, Oct, Dec to bring inflation down to mid-2s by end of next year.
• The economy is seen as able to grow through higher rates, supporting continued expansion.
• AI data center financing is expected to remain robust despite rate hikes, given high returns on investment.
• Short-term rate moves are not expected to significantly impact data center bond financing.