(Adds JPMorgan comment, detail on CPI)
By Saeed Azhar, Lananh Nguyen and Niket Nishant
Feb 14 (Reuters) - Companies and households are feeling
better about the economy despite recession predictions, the
heads of top U.S. banks said Tuesday, although the elevated
economic uncertainty is still seeing banks tightly control costs
and cut staff numbers.
Goldman Sachs Group Inc. Chief Executive Officer
David Solomon said sentiment among business leaders has
improved. His counterpart at Bank of America Corp , Brian
Moynihan, cited resilient consumer finances and spending as
positive signs. But both leaders cited risks to the economy,
including inflation, and said they would keep a lid on hiring
this year to constrain costs.
"While it's still very, very uncertain, the consensus has
shifted to be a little bit more dovish in the CEO community that
we can navigate through this in the United States, with a softer
economic landing than what people would have expected six months
ago," Solomon told investors at a conference in Florida.
At a separate event, Bank of America's CEO reiterated what
he has been saying for months - that consumer spending remains
robust and is underpinning the economy.
"Consumers remain very solid," Moynihan told investors in
New York. "Their balances are strong, their credit availability
is strong, and the spending activity in January actually picked
up a little bit."
The comments came as latest data showed U.S consumer prices
accelerated in January, but the annual increase was the smallest
since late 2021, pointing to a continued slowdown in inflation
and likely keeping the Federal Reserve on a moderate interest
rate hiking path.
JPMorgan Chase & Co CFO Jeremy Barnum told an
investor conference, "we've got another couple of hikes in the
forward. So at this point, it looks like peak (Fed) funds (rate)
at something like 5.5%."
Solomon said inflation is still "sticky" and a big
headwind for growth and for corporate investment.
JOB CUTS
Despite some easing concern about an economic slowdown, the
bank chiefs said they were managing headcount to constrain
costs. Goldman cut about 3,200 staff, or 6% of its workforce,
last month.
"We are in a position to lower the headcount," Solomon said.
"We've taken some action -- we have a much tighter hiring plan
in 2023," which entails less hiring, he said.
Bank of America will also manage its staffing through
attrition. It aims to have a workforce of about 213,000 to
214,000 in the next three to four months, Moynihan said, down
from 216,823 at the end of 2022.
Wells Fargo & Co Chief Financial Officer Mike
Santomassimo told the Florida conference that "things are going
to continue to get a little worse" when asked about the
potential for a recession. While consumer spending remains
healthy, credit card delinquencies are increasing, and growth in
Wells Fargo's commercial bank is moderating, he said.
Clients continue to be worried about interest rates,
inflation, geopolitics and "the potential prospects of a
recession and how that impacts their business," said Shahmir
Khaliq, global head of treasury and trade solutions at Citigroup
Inc.
A KBW index of bank stocks was down 0.3% in
afternoon trade on Tuesday after climbing nearly 12.3% so far
this year.
(Reporting by Saeed Azhar and Lananh Nguyen in New York and
Niket Nishant and Mehnaz Yasmin in Bengaluru; Editing by
Saumyadeb Chakrabarty and Nick Zieminski)
