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Bank of America CEO Brian Moynihan: Economy Starting to 'Come Out of the Hole'

By    |   Thursday, 28 May 2020 02:01 PM

Bank of America CEO Brian Moynihan says he thinks the U.S. economy is beginning to recover from shutdowns tied to the coronavirus pandemic.

Moynihan cited consumer spending figures from the millions of households using his lender’s credit and debit cards: While transactions collapsed by about 30% in April, it was down by only 5% to 10% in May.

“You’re starting to see the economy come out of the hole,” Moynihan told CNBC. “You’re seeing us come out of the depths of where we were in April, and that’s good news.”

Checking accounts below $5,000 in average balances actually had 30% to 40% more money in them compared with 12 weeks ago, he said.

The S&P 500 is up about 38% from the low hit in March as a restart in business activity after weeks of shutdown and massive amounts of stimulus measures to support the economy have driven hopes of a strong recovery, Reuters reported.

"Because of the reopening of the economy, I think investors are feeling more optimistic that we will end up with a V-shaped economic recovery," said Sam Stovall, chief investment strategist at CFRA Research in New York, saying that helped boost financials shares recently and other sectors across the board.

"Just in the past week, what we're seeing is that all sectors of all styles and sizes are in positive territory," Stovall said.

Meanwhile, Dallas Federal Reserve Bank President Robert Kaplan appears to be in agreement with Moynihan.

Kaplan said the U.S. economy has likely bottomed, but a healthy rebound depends on a massive increase in testing so that people feel comfortable resuming traveling, dining out and other pre-crisis activities.

"We need to dramatically increase testing and contact tracing...so that we can grow the economy faster and work down this unemployment rate," Kaplan told Reuters in a phone interview.

Doing so nationally, he said, would cost a fraction of the nearly $3 trillion the U.S. Congress has already committed to the economic rescue in loans to big businesses, grants to smaller ones, and extra unemployment insurance to the tens of millions who have lost their jobs so far.

"Why not spent the tens of billions of dollars ...to make sure ...we get the most benefit from the trillions we have spent," Kaplan said, adding that health experts say the U.S. needs about 3 million to 5 million tests a day, compared with 350,000 today. Small businesses are facing more obstacles on testing than bigger firms, he said.

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The U.S. economy is beginning to recover from shutdowns tied to the coronavirus pandemic, Bank of America CEO Brian Moynihan told CNBC.
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Thursday, 28 May 2020 02:01 PM
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