Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This is my message to the Financial Time. So you
Speaker 2: put out an article about the White House snubbing Brian moynihan.
Speaker 2: If they've seen the embrace between Brian and the COMMAS
Speaker 2: secretary just moments ago, and I think they would have
Speaker 2: written the article, would they?
Speaker 1: You know, they were talking about saw you last night.
Speaker 3: It was great.
Speaker 1: How were exactly exactly what they.
Speaker 2: Had to shut down a studio from m It wasn't.
Speaker 1: Yeah, they needed to reconcile or discuss all of their previous,
Speaker 1: you know, experiences together.
Speaker 4: But they're all positive.
Speaker 3: Let's stick with the economy.
Speaker 2: Positive outlet joining us now is the Bank of America
Speaker 2: Chairman and see from moynihan, Brian, good to see.
Speaker 5: You, Good to see Howard and I were on a
Speaker 5: panel yesterday and then yesterday.
Speaker 4: Yeah, they made a day before yesterday, the lunch to.
Speaker 5: Day and actually we're going to do another public venue
Speaker 5: where we're talking about how you raise the money to
Speaker 5: do all this investment he was talking about, so he's
Speaker 5: he's bullish on America and he watched part of the interview.
Speaker 4: Sounds like I said that.
Speaker 3: You guys are tea Yes, so let's stop the GDP forecast.
Speaker 5: So our research see that our research turn is one
Speaker 5: of the best in the world, led by a woman
Speaker 5: named Cannis Browning Platt, and they all come out and
Speaker 5: they raised their GDP for US to two point eight
Speaker 5: percent growth for the twenty six right before we came
Speaker 5: to Davos, the world about three and a half they
Speaker 5: raised a point one. And the important things I think
Speaker 5: to think about the US as you think about the
Speaker 5: travel last time from the last time you're here, last
Speaker 5: time we're here, we probably had two and a half
Speaker 5: percent four twenty six. Then Liberation Day it drops all
Speaker 5: the way to one and a half. And then as
Speaker 5: a settling in of there's the four primary policies of
Speaker 5: the Trump administration, trade and tariff, tax, immigration and deregulation
Speaker 5: starts settling in. We've raised it back to two six
Speaker 5: and out two point eight, and so that's spolish. And
Speaker 5: then underneath it we see what the consumer really does.
Speaker 5: And if we could talk about that, you know, the
Speaker 5: consumer spending was strong in the fourth quarter. When I've
Speaker 5: talked about that, it's four and a half trillion dollars
Speaker 5: our seventy million consumers which were blessed to have put
Speaker 5: into the economy a year for the fourth quarter that
Speaker 5: grew about five percent of the twenty four's fourth quarter
Speaker 5: in so far in January, it's growing a little faster that.
Speaker 5: Now you've got to be careful about two weeks don't
Speaker 5: make a quarter. But let's staying up.
Speaker 4: They're strong.
Speaker 2: Well, let's pair that GDP forecast with the bank and
Speaker 2: the business lines. Then what position are you in to
Speaker 2: take advantage of that better growth story in America?
Speaker 3: And what are you expected to show up?
Speaker 4: Well?
Speaker 5: Because who you are, and you know, we've been part
Speaker 5: owners of this company a long long time ago, and
Speaker 5: Mike's fuien a good thing around the market's business. That's
Speaker 5: which you're always interested even though there's all this other stuff.
Speaker 4: That makes a lot of money.
Speaker 5: But look, if you look at Jim DeMar's now co
Speaker 5: Prasident the company, but his team and markets this year
Speaker 5: had their last quarter, had their fifteenth consecutive quarter of
Speaker 5: year over year growth, and they just keep walking up
Speaker 5: ten percent up for the fourth quarter. If you look
Speaker 5: at investment banking, which is kind of interesting. So Matthew
Speaker 5: Coder a team, you know, early in December we thought
Speaker 5: we were about a billion and a half, and I
Speaker 5: went out at a conference and told people that in
Speaker 5: lo and Behore we ended a billion six five and
Speaker 5: that made twenty twenty five's the second best year of
Speaker 5: investment banking fees in our company his history in the
Speaker 5: only other one that was pandemic when everybody did a
Speaker 5: lot of financing. And next year we think we're bullish
Speaker 5: because the pipelines are full, and the broadening out of
Speaker 5: the revenue stream into the IPO markets and other things
Speaker 5: which are got to started a little bit this year
Speaker 5: but have been pretty depressed for a while, so that's
Speaker 5: coming in and deals, you know, just the deal flow.
Speaker 5: People can get deals done. When I was here a
Speaker 5: couple of davas ago, you know, the regulatory burdens were
Speaker 5: getting so high that you couldn't honestly tell a client
Speaker 5: who's trying to do a five billion dollar deal to
Speaker 5: do it, because you said, if you can to stabilize
Speaker 5: your company for six months a year trying to get
Speaker 5: this through and you don't get it through, is that
Speaker 5: worth it? And that's sort off the table, and even
Speaker 5: our industry, even though we can't do anything six months,
Speaker 5: approval of timelines are back to where they should be.
Speaker 1: It seems like there is an incredible amount of polishness
Speaker 1: here at Davos about deals, about IPOs, about all sorts
Speaker 1: of transactions and some of the issuances of debt inequity.
Speaker 1: At the same time, there's a real concern about affordability.
Speaker 1: There's a concern about how well the consumer is going
Speaker 1: to be able to face off with inflation. I'm just
Speaker 1: wondering if this is the year that we see the
Speaker 1: two come together, because last year they didn't come together.
Speaker 1: We saw the same kind of joblessness in terms of
Speaker 1: the growth, and we saw the same kind of lack
Speaker 1: of enthusiasm and sentiment surveys.
Speaker 5: Yeah, so if you look through the if you think
Speaker 5: about last year and think about how bullish people were
Speaker 5: last year because about the United States and the change
Speaker 5: of regatory regime and things like that. You know, in
Speaker 5: April things change and then by the end of the
Speaker 5: year it changed back, and so I think that had
Speaker 5: a lot to do with it. If you look at
Speaker 5: the consumer and what we see that spending level is
Speaker 5: not consistent with people who feel they're threatened in the future,
Speaker 5: and they're spending on all kinds of things now. If
Speaker 5: you look at the research team the Bank of America Institute,
Speaker 5: if you look at the work they've done. If you
Speaker 5: put three groups of customers lower income, third middle and
Speaker 5: come third, upper and come third, they're all growing at
Speaker 5: the middle and upper growing a faster rate. And frankly,
Speaker 5: that drives a lot of the growth. But if you
Speaker 5: look at whateverybody's spending on. They're spending on going out,
Speaker 5: they're spending on booking vacations, are spending on essential So
Speaker 5: what's the affordability? It's the inflation that people remember, and
Speaker 5: that is going to take a while for people to
Speaker 5: kind of put in the rearview mirror, because people can
Speaker 5: remember it's not too hard to remember.
Speaker 4: Five pre COVID where X was cost you, you.
Speaker 5: Know, to mail customers a gata gas cost you that
Speaker 5: your rent was this. And with that explosion and prices
Speaker 5: wages also went up. But the consumer thinks more about
Speaker 5: the price side and then the question of we'll turn
Speaker 5: over and get back and sink. And that's what's in
Speaker 5: those surveys. But if you watch your activity, and I'm
Speaker 5: a big believer, they'll tell you one thing, watch what
Speaker 5: they do, and that's what they're doing as of last
Speaker 5: Friday in the consumer base across seventy million people, which
Speaker 5: is a pretty good sample size.
Speaker 4: They're spending a lot.
Speaker 1: Maybe they would spend even more if there was a
Speaker 1: ten percent cap on credit card rates. I mean, look,
Speaker 1: this proposal got a lot of attention about a week ago,
Speaker 1: it feels like three years ago, and people push back
Speaker 1: and said it wasn't realistic, it wasn't feasible. We had
Speaker 1: Jimmie Diven come out and discuss about how try it
Speaker 1: and see what happens.
Speaker 4: What's your take on that?
Speaker 1: How realistic are you seeing those proposals as being So if.
Speaker 5: You step back, you know we're all for affordability and
Speaker 5: financial products. So you got the fault over the years
Speaker 5: of what we did on overdraft fees taking down by
Speaker 5: ninety percent over a course of fifteen years, what we
Speaker 5: did on having a five hundred dollars loan account of
Speaker 5: five dollars no interst rate, you could borrow emergency loan
Speaker 5: of five hundred dollars. Eight million customers have used that
Speaker 5: over the last several years to give you a cent.
Speaker 5: So and then we have no fraals, credit card, no rewards,
Speaker 5: and other stuff that people might attribute that is lower rate,
Speaker 5: It's not all the way down at that rate.
Speaker 4: So I think the question is, can we.
Speaker 5: Figure out a solution where you can avoid the equal
Speaker 5: opposite reaction?
Speaker 4: As our friend.
Speaker 5: Lafayette said the Hamilton song, you know, every action has
Speaker 5: an econopics reaction, So the equal opposite reaction we all
Speaker 5: talked about last week. If you actually make this a policy,
Speaker 5: it can reallocate credit. That will slow down spending. It
Speaker 5: will slow down credit availability, and that might not be
Speaker 5: what you're trying to achieve. So can you do something
Speaker 5: on a go forward basis on the limited things and
Speaker 5: even one year if you had go reshuffle the whole deck,
Speaker 5: that would be pretty pretty interesting and to cause a
Speaker 5: lot of change in people's views of what they have.
Speaker 4: Available for credit.
Speaker 5: You want people to have available for credit because that
Speaker 5: gives them the courage to spend.
Speaker 4: So we're trying to figure out we're all.
Speaker 5: Working trying to figure out, okay, given the affordability, given
Speaker 5: the thought process, is a way that we can do
Speaker 5: something that might help without having an equal and opposite reaction,
Speaker 5: because that would not be good. Our point is to
Speaker 5: get the credit losses down to the point you could
Speaker 5: afford that rate. You actually can never have a charge
Speaker 5: off and you start to think about who can get credit.
Speaker 4: That's thing. So we're working hard.
Speaker 5: We're trying to cope with solutions like we are on
Speaker 5: some of the fore the profoles around mortgage and for
Speaker 5: one K usage and trying to think of how you
Speaker 5: maybe can move the transfer wealth faster by giving people
Speaker 5: in my age bracket the ability to move a forum
Speaker 5: and K balance to pay help their kid buy a
Speaker 5: house or something like that.
Speaker 4: We threw that out to Howard yesterday.
Speaker 5: There's these ideas of letting people use their own form
Speaker 5: and K with less they can borrow from today. But
Speaker 5: there's a way you can actually just take a draw
Speaker 5: so they don't have the added depth burden. And then
Speaker 5: you've got to work on the supply side of housing.
Speaker 5: And you know, the President was interesting, Yes, you sense
Speaker 5: it to the issue. If you bring down house prices
Speaker 5: to make it affordable, is that the right answer for everybody?
Speaker 5: But on the other hand, have the kind of over
Speaker 5: demanded some of the cities who work in thirty thousand
Speaker 5: units in Charlotte twenty thousand, Boston with thirty forty thousand,
Speaker 5: one hundred thousand whatever in New York, you could build
Speaker 5: a lot before. I think you have a major impact
Speaker 5: on the downward trend of prices.
Speaker 6: Well, the DJT imposed deadline of January twenty has come
Speaker 6: and gone for the credit card caps. Have you spoken
Speaker 6: to the administration about this issue and talk to them
Speaker 6: about the potential counterintuitive problem with a ten percent cap?
Speaker 5: The team and I talked to administration all the time
Speaker 5: about these policies and stuff, and they listen and they're
Speaker 5: trying to figure out the same issue from their side,
Speaker 5: how can they make America more affordable? And I think
Speaker 5: the number one thing we can do to make America
Speaker 5: more affordable is keep everybody employed. And Ernie's growth in
Speaker 5: our in our client base across seventy million people, we
Speaker 5: see a lot of paychecks come in and that's growing
Speaker 5: at three percent four percent, and that's a good number.
Speaker 5: And so know that wage growth continuity will ultimately make
Speaker 5: people feel different about it, letely understandable why they feel
Speaker 5: the sort of unem as of how these things came
Speaker 5: into their household, and then what they want to do
Speaker 5: about it. And then rent affordability. We've given them the
Speaker 5: types of ideas I talked about.
Speaker 2: We need to see some bit of hiring as well.
Speaker 2: Can we talk about hiring the AI story. It's difficult
Speaker 2: to understand what's happened with hiring in this country in
Speaker 2: America over the last twelve months. What do you think
Speaker 2: has happened? What's your understanding of this drop off in hiring.
Speaker 2: Is it a supply side story? What do you think
Speaker 2: it is?
Speaker 5: I think I think there's a concern of availability at
Speaker 5: labor because of the population growth, immigration dynamics that I
Speaker 5: think again, the administration is trying to get.
Speaker 4: Much more fine around exactly what they're.
Speaker 5: Doing and not threatening people who've been in naturalized citizens
Speaker 5: and things like that, and that was never what they're
Speaker 5: intended to do, but people started reading it, so I think,
Speaker 5: And now if you've looked at our small business surveys,
Speaker 5: labor availability became an issue again and hadn't been for
Speaker 5: a good while. And so so I think that that's
Speaker 5: something we've advised administration sho be mindful of because you
Speaker 5: don't want that to become a constraint on people's views
Speaker 5: of growing. Now, the big hiring story here we're Davos
Speaker 5: that make you saying this year is about AI. Last
Speaker 5: year is about AI. The year form was out AA.
Speaker 5: The form is out in twenty nineteen. The premise was
Speaker 5: the Fourth Industrial Revolution, which was AI without just saying it.
Speaker 4: And so it's not a new theme.
Speaker 5: And so I give you since the first time you
Speaker 5: probably asked somebody who decided to pandemic, say post pandemic
Speaker 5: about is AI going to cause you to change your
Speaker 5: hiring Let's call it four years, it's called three years.
Speaker 4: We hired sixty five.
Speaker 5: Thousand people Bank of America, two thousand year kids out
Speaker 5: of school plus Saudi in school every year now and
Speaker 5: that's for the turn of rate eight percent we got
Speaker 5: to hire. In the month of January, we'll hire like
Speaker 5: thirteen hundred people and will have the same head count
Speaker 5: we had the month of December. Are these people doing
Speaker 5: exactly what the people left? Sometimes sometimes those jobs got limited.
Speaker 5: But that's what management is challenged, is how do you
Speaker 5: think to make the changes. We've got to make the
Speaker 5: transformations to make the customer experience the best it can be,
Speaker 5: to grow the company and to manage expense. And that
Speaker 5: means you have to really pay attention to the head
Speaker 5: account movement. And that's why we watch it carefully.
Speaker 3: That's why the tension is though.
Speaker 2: I think for a lot of people, you've got the
Speaker 2: societal problem on the one hand, and on the other hand,
Speaker 2: you've got the opportunity. And the opportunity is to do
Speaker 2: even more with what you've already got. And that's the
Speaker 2: productivity story, and that's what you're selling to invest is
Speaker 2: that's the picture of the moment, isn't it.
Speaker 5: So we had twenty eighty five thousand people in twenty
Speaker 5: ten when I took when the team took over, we
Speaker 5: have two hundred twelve thousand people today. And you never
Speaker 5: heard anything about labor dislocation because we just kept planning ahead.
Speaker 5: But that's the application of technology. Just take the consumer
Speaker 5: business and I showed an investor date one hundred thousand
Speaker 5: people to fifty and make it simple. If you look
Speaker 5: at that, the business is three times as big in
Speaker 5: terms of transactions activity. But that's the power of all
Speaker 5: You've got eight devices sitting on the tables in front of.
Speaker 4: You and the interact activity of what you'll do two.
Speaker 5: It's a combination of AI plus alerts and things like that.
Speaker 5: People that get focused on just you know, erica growth.
Speaker 5: In our case, you say no, there's literally a billion
Speaker 5: alerts that go out, which is basically artificial intelligence people
Speaker 5: set up in advance to tell them things go on.
Speaker 4: You don't need them to go. And Eric could ask
Speaker 4: if this, if a check went through.
Speaker 5: My account above twenty five hundred dollars, if you set
Speaker 5: the alerts, you said.
Speaker 1: Something that we reflect on a lot on our show.
Speaker 1: You said a lot of things, but one thing in particular,
Speaker 1: that the business would grow, but that your staff would
Speaker 1: stay about the same size. And you said that about
Speaker 1: a year ago, maybe two years ago. That's a near
Speaker 1: term phenomenon. In five to ten years, will it be
Speaker 1: the same or will it start to change in terms
Speaker 1: of actual shrinkage.
Speaker 4: Well, if Havard's writers, if view of growth, will need
Speaker 4: a lot more human content to keep up with it.
Speaker 4: And I'll give you this. I'll give you the historical context.
Speaker 5: In twenty nineteen, I was in a room downstairs and
Speaker 5: the people were bringing their hands and as.
Speaker 4: The way they do it.
Speaker 5: Davos said, all this technology going to take away the jobs.
Speaker 5: And so in preparation, I said, I've got to give
Speaker 5: some hope here. So I went and did the research.
Speaker 5: In nineteen sixty nine, American employed eighty million people in
Speaker 5: twenty nineteen eployed one hundred and sixty million people. I
Speaker 5: think there was a lot of technology and change. It
Speaker 5: came from nineteen sixty nine to twenty nineteen. Under that
Speaker 5: stuff in front of you was available, you wouldn't have
Speaker 5: a computer at work, you wouldn't have an email accounts.
Speaker 5: You're still getting charged by the minute for phone calls.
Speaker 5: And think about that change, and think about we absorbed
Speaker 5: eighty million more people working. So I don't want to
Speaker 5: be Pollyanna about it, but I think you have to
Speaker 5: be optimistic that if we can grow the economy and
Speaker 5: grow the thing, we will absorb. And by the way,
Speaker 5: the population to grow US is very modest without immigration,
Speaker 5: and there's a natural two plus percent of the people
Speaker 5: or whatever it is die every year. It's morbid, but
Speaker 5: that's what happens, and so and so you have burst
Speaker 5: that kind of replace it, and you know, and people retire,
Speaker 5: and so that's why I think management's core challenges and
Speaker 5: manage us through and get employees to take the spirit
Speaker 5: and help drive the growth in the company and be
Speaker 5: a part of the solution and help us make it happen.
Speaker 5: And my guess is, yeah, it might incrementally move headcount,
Speaker 5: but if we manage it to attrition and retirements and stuff,
Speaker 5: we ought to be able to manage the outcome.
Speaker 3: How did we ever live without the bloombog sound?
Speaker 4: What was that?
Speaker 3: Have a like count?
Speaker 4: I don't think I did.
Speaker 2: We'ren just the final question. Yes, you mentioned how it.
Speaker 2: We tolked about it, we jogged about it. That'stile that
Speaker 2: the COMA saying the relationship with the White House, how
Speaker 2: would you characterize it in your own opinion?
Speaker 3: Right now?
Speaker 4: Oh, look, I got you always want to get invitation.
Speaker 5: This is dabas a place invitation, So we invite you
Speaker 5: guys someplace you want that invitation. So the rationships good.
Speaker 5: We do continue to give lots of ideas. And it
Speaker 5: was ironic that what was fun. We had a client
Speaker 5: diner last night and Howard came to taught to clients.
Speaker 5: It was late as they finished up the news on Greenland,
Speaker 5: and he was able to come in.
Speaker 4: And talk about what happened.
Speaker 5: And those were international clients who admittedly were confused for
Speaker 5: forty eight hours, you know, and what I've tried to
Speaker 5: do with the administration's policies and talk, especially people outside
Speaker 5: nine States, to say, listen to what they're saying. You
Speaker 5: can figure out what's going to happen. Don't confuse security
Speaker 5: with a trade policy. They wanted to get action and
Speaker 5: they did and that's a great thing. And you saw
Speaker 5: you leave aside the market reaction, which can go up
Speaker 5: and down on a day, well you saw is the
Speaker 5: clients say okay, I got it. Now let's go set
Speaker 5: the business plans that will help have that growth in
Speaker 5: the future.
Speaker 3: Ron, it's going to see you looking forward to covering
Speaker 3: the World Cup.
Speaker 2: With you as well. Thanks for your months. Thank you, sir,
Speaker 2: Thank you very much. Bro one and a half the
Speaker 2: Bank of America Chairman and c e O.