Bank of America CEO U.S. economy heading towards 2.8% growth

Bank of America’s Chief Executive Officer, Brian Moynihan, has projected that the United States economy is poised to expand by 2.8% in 2026, surpassing prevailing market expectations. This bullish outlook is anchored by resilient consumer spending and robust investment in artificial intelligence (AI) infrastructure, which Moynihan identifies as key drivers of growth. Furthermore, he anticipates that the Federal Reserve may implement rate cuts later this year, providing additional stimulus to the economy.

Consumer Spending: The Pillar of Growth
Moynihan emphasised the enduring strength of the American consumer as a cornerstone of economic expansion. Despite ongoing concerns over trade tariffs, Bank of America’s aggregated card data reveals that consumer spending contributed 5% more to the U.S. economy in the fourth quarter of 2025 compared to the same period in 2024. This increase translates to approximately $1.5 trillion in economic activity. Early figures from January 2026 suggest that this growth trend is accelerating, underscoring the pivotal role of consumers in a predominantly consumption-driven economy. Small businesses are also exhibiting healthy momentum, reporting rising sales and expanded payrolls.

AI Investment Fuelling Productivity
Investment in artificial intelligence infrastructure and enterprise adoption is emerging as a significant catalyst for economic expansion. Corporations are leveraging strong cash flows and accessible capital markets to invest heavily in data centres and AI systems. Bank of America itself is committing several hundred million dollars to AI initiatives in 2026, reflecting a broader industry trend. These investments are anticipated to enhance productivity and reshape business operations across multiple sectors, generating long-term growth momentum.

Economic Forecast and Federal Reserve Policy
Moynihan’s forecast of 2.8% GDP growth exceeds consensus estimates and aligns with the Bank of America Institute’s global growth outlook of 3.6%, with India expected to lead at 6.5% and Europe at 1%. He predicts that anticipated Federal Reserve rate cuts, combined with moderating inflation projected towards the end of 2027, will support ongoing expansion while maintaining stable unemployment levels. Strong fiscal tailwinds, including benefits from prior tax reforms, are also expected to bolster growth. Notably, Bank of America reported robust Q4 2025 earnings, with net income up 18% year-on-year and revenue rising 7%, signalling financial strength and confidence.

Market Response
The U.S. stock market displayed modest gains, with the US500 index up 0.21% on 23 January 2026, closing at 6,928 points. Bank of America shares (BAC) were trading at $52.07 on 21 January, with a P/E ratio of 13.58, down from an all-time high of $57.25 earlier in the month. While valuations in AI-related sectors continue to attract debate, the underlying fundamentals—resilient consumer spending and substantial capital investment—are underpinning investor confidence. Moynihan described the current environment as a “proud bull market,” driven by measured earnings growth rather than the meteoric gains of recent years. Persistent trade tensions and business uncertainties, however, remain potential headwinds.

In summary, strong consumer activity, strategic AI investment, and accommodative monetary policy position the U.S. economy for a solid year ahead, signalling a period of steady growth rather than volatile surges.