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This is my message to the Financial Time. So you put out an article about the White House snubbing Brian moynihan. If they've seen the embrace between Brian and the COMMAS secretary just moments ago, and I think they would have written the article, would they?
You know, they were talking about saw you last night.
It was great.
How were exactly exactly what they.
Had to shut down a studio from m It wasn't.
Yeah, they needed to reconcile or discuss all of their previous, you know, experiences together.
But they're all positive.
Let's stick with the economy.
Positive outlet joining us now is the Bank of America Chairman and see from moynihan, Brian, good to see.
You, Good to see Howard and I were on a panel yesterday and then yesterday.
Yeah, they made a day before yesterday, the lunch to.
Day and actually we're going to do another public venue where we're talking about how you raise the money to do all this investment he was talking about, so he's he's bullish on America and he watched part of the interview.
Sounds like I said that.
You guys are tea Yes, so let's stop the GDP forecast.
So our research see that our research turn is one of the best in the world, led by a woman named Cannis Browning Platt, and they all come out and they raised their GDP for US to two point eight percent growth for the twenty six right before we came to Davos, the world about three and a half they raised a point one. And the important things I think to think about the US as you think about the travel last time from the last time you're here, last time we're here, we probably had two and a half
percent four twenty six. Then Liberation Day it drops all the way to one and a half. And then as a settling in of there's the four primary policies of the Trump administration, trade and tariff, tax, immigration and deregulation starts settling in. We've raised it back to two six and out two point eight, and so that's spolish. And then underneath it we see what the consumer really does. And if we could talk about that, you know, the
consumer spending was strong in the fourth quarter. When I've talked about that, it's four and a half trillion dollars our seventy million consumers which were blessed to have put into the economy a year for the fourth quarter that grew about five percent of the twenty four's fourth quarter in so far in January, it's growing a little faster that. Now you've got to be careful about two weeks don't make a quarter. But let's staying up.
They're strong.
Well, let's pair that GDP forecast with the bank and the business lines. Then what position are you in to take advantage of that better growth story in America?
And what are you expected to show up?
Well?
Because who you are, and you know, we've been part owners of this company a long long time ago, and Mike's fuien a good thing around the market's business. That's which you're always interested even though there's all this other stuff.
That makes a lot of money.
But look, if you look at Jim DeMar's now co Prasident the company, but his team and markets this year had their last quarter, had their fifteenth consecutive quarter of year over year growth, and they just keep walking up ten percent up for the fourth quarter. If you look
at investment banking, which is kind of interesting. So Matthew Coder a team, you know, early in December we thought we were about a billion and a half, and I went out at a conference and told people that in lo and Behore we ended a billion six five and that made twenty twenty five's the second best year of investment banking fees in our company his history in the only other one that was pandemic when everybody did a
lot of financing. And next year we think we're bullish because the pipelines are full, and the broadening out of the revenue stream into the IPO markets and other things which are got to started a little bit this year but have been pretty depressed for a while, so that's coming in and deals, you know, just the deal flow.
People can get deals done. When I was here a couple of davas ago, you know, the regulatory burdens were getting so high that you couldn't honestly tell a client who's trying to do a five billion dollar deal to do it, because you said, if you can to stabilize your company for six months a year trying to get this through and you don't get it through, is that
worth it? And that's sort off the table, and even our industry, even though we can't do anything six months, approval of timelines are back to where they should be.
It seems like there is an incredible amount of polishness here at Davos about deals, about IPOs, about all sorts of transactions and some of the issuances of debt inequity. At the same time, there's a real concern about affordability. There's a concern about how well the consumer is going to be able to face off with inflation. I'm just wondering if this is the year that we see the two come together, because last year they didn't come together.
We saw the same kind of joblessness in terms of the growth, and we saw the same kind of lack of enthusiasm and sentiment surveys.
Yeah, so if you look through the if you think about last year and think about how bullish people were last year because about the United States and the change of regatory regime and things like that. You know, in April things change and then by the end of the year it changed back, and so I think that had a lot to do with it. If you look at the consumer and what we see that spending level is not consistent with people who feel they're threatened in the future,
and they're spending on all kinds of things now. If you look at the research team the Bank of America Institute, if you look at the work they've done. If you put three groups of customers lower income, third middle and come third, upper and come third, they're all growing at the middle and upper growing a faster rate. And frankly, that drives a lot of the growth. But if you
look at whateverybody's spending on. They're spending on going out, they're spending on booking vacations, are spending on essential So what's the affordability? It's the inflation that people remember, and that is going to take a while for people to kind of put in the rearview mirror, because people can remember it's not too hard to remember.
Five pre COVID where X was cost you, you.
Know, to mail customers a gata gas cost you that your rent was this. And with that explosion and prices wages also went up. But the consumer thinks more about the price side and then the question of we'll turn over and get back and sink. And that's what's in
those surveys. But if you watch your activity, and I'm a big believer, they'll tell you one thing, watch what they do, and that's what they're doing as of last Friday in the consumer base across seventy million people, which is a pretty good sample size.
They're spending a lot.
Maybe they would spend even more if there was a ten percent cap on credit card rates. I mean, look, this proposal got a lot of attention about a week ago, it feels like three years ago, and people push back and said it wasn't realistic, it wasn't feasible. We had Jimmie Diven come out and discuss about how try it and see what happens.
What's your take on that?
How realistic are you seeing those proposals as being So if.
You step back, you know we're all for affordability and financial products. So you got the fault over the years of what we did on overdraft fees taking down by ninety percent over a course of fifteen years, what we did on having a five hundred dollars loan account of five dollars no interst rate, you could borrow emergency loan of five hundred dollars. Eight million customers have used that over the last several years to give you a cent.
So and then we have no fraals, credit card, no rewards, and other stuff that people might attribute that is lower rate, It's not all the way down at that rate.
So I think the question is, can we.
Figure out a solution where you can avoid the equal opposite reaction?
As our friend.
Lafayette said the Hamilton song, you know, every action has an econopics reaction, So the equal opposite reaction we all talked about last week. If you actually make this a policy, it can reallocate credit. That will slow down spending. It will slow down credit availability, and that might not be
what you're trying to achieve. So can you do something on a go forward basis on the limited things and even one year if you had go reshuffle the whole deck, that would be pretty pretty interesting and to cause a lot of change in people's views of what they have.
Available for credit.
You want people to have available for credit because that gives them the courage to spend.
So we're trying to figure out we're all.
Working trying to figure out, okay, given the affordability, given the thought process, is a way that we can do something that might help without having an equal and opposite reaction, because that would not be good. Our point is to get the credit losses down to the point you could afford that rate. You actually can never have a charge off and you start to think about who can get credit.
That's thing. So we're working hard.
We're trying to cope with solutions like we are on some of the fore the profoles around mortgage and for one K usage and trying to think of how you maybe can move the transfer wealth faster by giving people in my age bracket the ability to move a forum and K balance to pay help their kid buy a house or something like that.
We threw that out to Howard yesterday.
There's these ideas of letting people use their own form and K with less they can borrow from today. But there's a way you can actually just take a draw so they don't have the added depth burden. And then you've got to work on the supply side of housing. And you know, the President was interesting, Yes, you sense it to the issue. If you bring down house prices to make it affordable, is that the right answer for everybody?
But on the other hand, have the kind of over demanded some of the cities who work in thirty thousand units in Charlotte twenty thousand, Boston with thirty forty thousand, one hundred thousand whatever in New York, you could build a lot before. I think you have a major impact on the downward trend of prices.
Well, the DJT imposed deadline of January twenty has come and gone for the credit card caps. Have you spoken to the administration about this issue and talk to them about the potential counterintuitive problem with a ten percent cap?
The team and I talked to administration all the time about these policies and stuff, and they listen and they're trying to figure out the same issue from their side, how can they make America more affordable? And I think the number one thing we can do to make America more affordable is keep everybody employed. And Ernie's growth in our in our client base across seventy million people, we see a lot of paychecks come in and that's growing at three percent four percent, and that's a good number.
And so know that wage growth continuity will ultimately make people feel different about it, letely understandable why they feel the sort of unem as of how these things came into their household, and then what they want to do about it. And then rent affordability. We've given them the types of ideas I talked about.
We need to see some bit of hiring as well. Can we talk about hiring the AI story. It's difficult to understand what's happened with hiring in this country in America over the last twelve months. What do you think has happened? What's your understanding of this drop off in hiring. Is it a supply side story? What do you think it is?
I think I think there's a concern of availability at labor because of the population growth, immigration dynamics that I think again, the administration is trying to get.
Much more fine around exactly what they're.
Doing and not threatening people who've been in naturalized citizens and things like that, and that was never what they're intended to do, but people started reading it, so I think, And now if you've looked at our small business surveys, labor availability became an issue again and hadn't been for a good while. And so so I think that that's something we've advised administration sho be mindful of because you don't want that to become a constraint on people's views
of growing. Now, the big hiring story here we're Davos that make you saying this year is about AI. Last year is about AI. The year form was out AA. The form is out in twenty nineteen. The premise was the Fourth Industrial Revolution, which was AI without just saying it.
And so it's not a new theme.
And so I give you since the first time you probably asked somebody who decided to pandemic, say post pandemic about is AI going to cause you to change your hiring Let's call it four years, it's called three years.
We hired sixty five.
Thousand people Bank of America, two thousand year kids out of school plus Saudi in school every year now and that's for the turn of rate eight percent we got to hire. In the month of January, we'll hire like thirteen hundred people and will have the same head count we had the month of December. Are these people doing exactly what the people left? Sometimes sometimes those jobs got limited. But that's what management is challenged, is how do you
think to make the changes. We've got to make the transformations to make the customer experience the best it can be, to grow the company and to manage expense. And that means you have to really pay attention to the head account movement. And that's why we watch it carefully.
That's why the tension is though.
I think for a lot of people, you've got the societal problem on the one hand, and on the other hand, you've got the opportunity. And the opportunity is to do even more with what you've already got. And that's the productivity story, and that's what you're selling to invest is that's the picture of the moment, isn't it.
So we had twenty eighty five thousand people in twenty ten when I took when the team took over, we have two hundred twelve thousand people today. And you never heard anything about labor dislocation because we just kept planning ahead. But that's the application of technology. Just take the consumer business and I showed an investor date one hundred thousand people to fifty and make it simple. If you look at that, the business is three times as big in
terms of transactions activity. But that's the power of all You've got eight devices sitting on the tables in front of.
You and the interact activity of what you'll do two.
It's a combination of AI plus alerts and things like that. People that get focused on just you know, erica growth. In our case, you say no, there's literally a billion alerts that go out, which is basically artificial intelligence people set up in advance to tell them things go on.
You don't need them to go. And Eric could ask if this, if a check went through.
My account above twenty five hundred dollars, if you set the alerts, you said.
Something that we reflect on a lot on our show. You said a lot of things, but one thing in particular, that the business would grow, but that your staff would stay about the same size. And you said that about a year ago, maybe two years ago. That's a near term phenomenon. In five to ten years, will it be the same or will it start to change in terms of actual shrinkage.
Well, if Havard's writers, if view of growth, will need a lot more human content to keep up with it. And I'll give you this. I'll give you the historical context.
In twenty nineteen, I was in a room downstairs and the people were bringing their hands and as.
The way they do it.
Davos said, all this technology going to take away the jobs. And so in preparation, I said, I've got to give some hope here. So I went and did the research. In nineteen sixty nine, American employed eighty million people in twenty nineteen eployed one hundred and sixty million people. I think there was a lot of technology and change. It
came from nineteen sixty nine to twenty nineteen. Under that stuff in front of you was available, you wouldn't have a computer at work, you wouldn't have an email accounts. You're still getting charged by the minute for phone calls. And think about that change, and think about we absorbed eighty million more people working. So I don't want to be Pollyanna about it, but I think you have to be optimistic that if we can grow the economy and
grow the thing, we will absorb. And by the way, the population to grow US is very modest without immigration, and there's a natural two plus percent of the people
or whatever it is die every year. It's morbid, but that's what happens, and so and so you have burst that kind of replace it, and you know, and people retire, and so that's why I think management's core challenges and manage us through and get employees to take the spirit and help drive the growth in the company and be a part of the solution and help us make it happen.
And my guess is, yeah, it might incrementally move headcount, but if we manage it to attrition and retirements and stuff, we ought to be able to manage the outcome.
How did we ever live without the bloombog sound?
What was that?
Have a like count?
I don't think I did.
We'ren just the final question. Yes, you mentioned how it. We tolked about it, we jogged about it. That'stile that the COMA saying the relationship with the White House, how would you characterize it in your own opinion?
Right now?
Oh, look, I got you always want to get invitation.
This is dabas a place invitation, So we invite you guys someplace you want that invitation. So the rationships good. We do continue to give lots of ideas. And it was ironic that what was fun. We had a client diner last night and Howard came to taught to clients. It was late as they finished up the news on Greenland, and he was able to come in.
And talk about what happened.
And those were international clients who admittedly were confused for forty eight hours, you know, and what I've tried to do with the administration's policies and talk, especially people outside nine States, to say, listen to what they're saying. You can figure out what's going to happen. Don't confuse security with a trade policy. They wanted to get action and
they did and that's a great thing. And you saw you leave aside the market reaction, which can go up and down on a day, well you saw is the clients say okay, I got it. Now let's go set the business plans that will help have that growth in the future.
Ron, it's going to see you looking forward to covering the World Cup.
With you as well. Thanks for your months. Thank you, sir, Thank you very much. Bro one and a half the Bank of America Chairman and c e O.