BofA CEO sees two-year housing slowdown as U.S. rates rise

Bank of America Chairman and CEO Brian Moynihan testifies before a Senate Banking, Housing, and Urban Affairs hearing on "Annual Oversight of the Nation's Largest Banks", on Capitol Hill in Washington, U.S., September 22, 2022. REUTERS/Evelyn Hockstein

Nov 29 (Reuters) - Bank of America Corp (BAC.N) chief executive officer Brian Moynihan said activity in the U.S. housing market will probably slow for two years as the Federal Reserve raises interest rates, according to an interview Tuesday on CNN.

"This is the toughest thing, because you have to slow down the economy, you have to slow down inflation, and the way you do that is raising interest rates," Moynihan said, referring to the Fed's actions. "The intended outcome of their policies doesn't feel good when you're trying to buy a home."

The Fed's efforts to tame inflation could take about two years, leading to a slowdown in mortgage activity, he said. Rising rents are also going to strain on the finances of Americans who rent their homes, he said.

Despite the softness in housing, Moynihan cited a strong labor market and resilient consumer spending as buffers for the economy as it approaches a "mild recession" next year, he said.

Reporting by Lananh Nguyen and Niket Nishant in Bengaluru, Editing by Louise Heavens

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