Since the end of COVID, solid consumer spending has provided a backbone to the economy—allowing the Fed to wrestle down inflation without a serious hit to employment and growth.

Now, with potentially inflationary tariffs on the horizon, consumers are once again being asked to stretch their paychecks even further.

While shoppers’ sentiment has taken a hit, the Bank of America CEO confirmed, that hasn’t stopped them from reinvesting their income in the economy.

“We’re in this classic moment … where the consumer is saying, ‘I’m getting more pessimistic,’ in some of the surveys and things like that,” Moynihan told CNBC’s ‘Squawk Box’. “But if you actually look what they’re doing day to day, they continue to spend, which means the economy ought to be holding up better than people think.”

He pointed out, citing Bank of America card data, that consumer spending was up around 6% for the first two and a half months of 2025 compared with the same period last year.

“We see the consumer continue to be solid, and that should bode well for the economy,” he added. “There’s a lot of questions out there, and I think that will sort through. But right now, we’re not talking about what could happen, we’re talking about what is happening. The consumer continues to spend pretty strongly for the first part of this year.”

Little and often shopping

While consumers’ spending has increased for the better, their shopping methods have changed.

As BofA’s research institute pointed out in a note last week, “one response to earlier food inflation was that consumers shopped for groceries more often but spent less each time. More recently though, the amount spent per transaction has increased while the number of times consumers shop has eased only slightly.”

Evidence of inflation is clear on some of the most day-to-day items in a family’s pantry. The St Louis Fed’s index for a dozen eggs, for example, hit record prices in February 2025, with an average price nearing $6.

The note continues: “This approach of ‘more but smaller’ shops may allow consumers to focus on buying things they feel represent good value at particular stores. And a natural counterpart is households also shopping increasingly at ‘value’ grocery stores.”

That being said, while increased spending is staving off recession fears, tariff threats are still hampering BofA’s outlook.

Moynihan added that his research team “doesn’t see a recession, but they continue to consider the tariff impact on GDP. And they’ll keep reflecting that. But they don’t see a recession. They don’t see inflation being sticky.”

For the first two quarters of this year BofA is pencilling in growth of 2.5%, but Moynihan added: “My guess is as … those tariffs become more real as we move to the April 2nd date they’ll bring that down a bit and probably closer to 2% for the year. And they have two 2% GDP growth for ’26.

“That’s trend growth. That’s what we’ve all been trying to get to. For 10 or 15 years after the financial crisis, we never saw that kind of GDP growth rate except in corrective periods. And we never saw inflation.”