Bank of America Vice Chairman Keith Banks warns as the economy slows and margins get squeezed, costs will grow faster than revenues.
, Wells Fargo and Deutsche Bank, although they remain uncertain about its severity.
Bank of America Vice Chairman Keith Banks signaled concerns over multiple macroeconomic predictions on"Mornings with Maria" Monday, noting"none of which is good for the bottom line."because persistent and elevated inflation has pushed the Federal Reserve to raise interest rates at the fastest pace since the 1980s, which threatens to curtail consumer and business spending by pushing borrowing costs higher.
"We think as the economy slows, revenue is going to slow, and as a result, you're going to start to have some margin pressure and also negative operating leverage, none of which is good for earnings," Banks said. According to the market expert, margin trading will first get squeezed and cause operating leverage "to flip over."