Bank of America just made a strong call on inflation, economy

Bank of America watches astir 38.7 cardinal checking accounts.

That's not a selling number. It's the size of the model the slope has into however mean Americans are really spending their money, week by week.

When Brian Moynihan speaks astir the consumer, that's the information he's pulling from, and close present that information is telling a analyzable story.

On July 14, Bank of America reported second-quarter nett income of $9.1 billion, up 27% from a twelvemonth ago. Earnings per stock jumped 34%. BAC banal roseate 2% successful greeting trading.

And connected the post-earnings call, Moynihan described an system that was holding up amended than expected adjacent arsenic BofA's ain probe squad is tracking ostentation adjacent its highest level since 2023.

What Bank of America says astir the U.S. system close now

"The U.S. system has proved much durable than expected, supported by the beardown consumer, ongoing AI-driven investments crossed the board, and easing vigor costs," Moynihan said connected the call, according to Yahoo Finance. "Though ostentation and tighter monetary argumentation stay cardinal risks."

He wasn't claiming everything is fine. He was saying the system has absorbed much unit than astir radical expected without breaking.

Related: Bank of America warns America present has 2 economies

That's meaningful discourse erstwhile state prices person been elevated from the ongoing Iran struggle and investors are inactive trying to fig retired whether user spending tin clasp up successful the 2nd fractional of the year.

Ahead of the net call, BofA's probe squad raised its 2026 U.S. GDP maturation forecast to 2.2%, and expects planetary maturation astatine 3.2% this twelvemonth earlier rising to 3.5% successful 2027, CNBC reported.

The ostentation occupation that a durable system makes harder

Here's the hostility successful BofA's ain research. A resilient user is bully quality for growth. It's besides wherefore ostentation won't travel down quickly.

When radical support spending, prices enactment up. And erstwhile prices enactment up, the Fed keeps rates high.

BofA has made this transportation explicit: The operation of resilient user spending and elevated vigor costs is precisely what's keeping its Fed outlook hawkish, arsenic TheStreet reported.

June's CPI people came successful cooler than expected, with halfway CPI adjacent to level period implicit month. But BofA's probe squad noted the brushed fig mostly conscionable reversed an summation driven by lipid prices tied to the Iran conflict. On a inclination basis, ostentation hasn't moved much.

Despite the ostentation backdrop, the existent spending numbers person stayed strong.Spencer/Getty Images

The Bank of America user information down the system outlook

Despite the ostentation backdrop, the existent spending numbers person stayed strong. Consumer spending grew astir 5% twelvemonth implicit twelvemonth successful the archetypal fractional of 2026, past picked up successful Q2 to tally astatine 6% oregon much connected a year-over-year basis.