Bank of America CEO Brian Moynihan said Wednesday that consumers are continuing to spend and economic growth should be solid though slower this year.

Despite surveys indicating that confidence is at a nearly three-year low amid increasing worries about inflation, Moynihan told CNBC that spending data shows consumers are still shelling out money, though shifting away from goods and into services.

“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,” he said during a “Squawk Box” interview. “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.”

From a numbers standpoint, that means gross domestic product growth this year of closer to 2% from recent trends closer to 3%, according to the banking chief. Some of the slowdown will come from President Donald Trump’s tariffs, which Moynihan estimated will cut about 0.4 percentage point off growth in the near term before the economy adjusts.

However, he called the 2% level “trend growth. That’s what we’ve all been trying to get to for 10 or 15 years after the financial crisis.”

“We see the consumer continue to be solid, and that should bode well for the economy,” Moynihan 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 is happening. The consumer continues to spend pretty strongly for the first part of this year.”

The interview came the same day that the Federal Reserve will issue its latest decision on interest rates. Markets give almost no chance to a reduction at the meeting, and Moynihan backed up the bank’s call that not only will the central bank not move Wednesday, but it also will be on hold through 2026.

“I would think, though that the Fed would be a little cautious about cutting, not knowing what the impact of tariffs is going to be,” he said. “It would seem that maybe they’d want to hold on to the firepower that they’ve built up over the last year or so… They shouldn’t be premature to try to boost the economy when it’s growing at 2%.”

Moynihan added that it would be better to keep interest rates had a “real interest rate” that was closer to 3% than the near-zero that was prevalent from the financial crisis into the Covid pandemic.

The Bank of England is widely expected to hold interest rates when it meets on Thursday, as the U.K. faces economic headwinds both at home and abroad.

The central bank is highly likely to keep its benchmark interest rate at 4.5% at its March meeting, given the unpredictability of President Donald Trump’s trade tariffs and a fledgling global trade war, and how those factors could affect inflation in the U.K.

The BOE is also convening as the U.K economy shows signs of stalling, with monthly growth data showing anemic output. Thursday’s meeting comes just days before U.K. government taxation changes come into force that have proven unpopular with businesses, which say their rising tax burden could dent growth, investment and jobs.

For its part, the Bank of England already warned at its last meeting in February that it would tread carefully, as it downgraded the U.K.’s growth forecast for 2025 and predicted a temporary rise in the rate of inflation to 3.7% — above the bank’s target of 2% — which BOE policymakers said would be caused by higher energy prices.

As for Trump’s tariffs, Bank of England Governor Andrew Bailey warned earlier in March that potential trade duties were another threat to the country’s economy, and growth, telling British lawmakers that “the risks to the U.K. economy, and indeed the world economy, are substantial” and that U.K. citizens would have less money “in their pockets” as a result of tariffs.

Reeves’ ‘Spring Statement’ will be announced alongside economic forecasts from the Office for Budget Responsibility, the U.K.’s independent economic and fiscal forecaster, which gives its assessment on the likely impact of the government’s taxation and spending plans that were announced last fall.

That budget included £40 billion ($51.9 billion) worth of tax rises — with the burden falling mainly on businesses — to plug a black hole in the public finances and allow for investment in public services.

The OBR is widely expected to downgrade its U.K. economic forecasts, putting further pressure on Reeves to amend her policy plans.

“It was not supposed to be like this. U.K. chancellor Rachel Reeves planned to present the government’s official biannual forecast on 26 March without making any changes to policy. However, a rise in market interest rates, high borrowing in fiscal year 2024-25, and a possible downgrade to the Office for Budget Responsibility’s productivity growth assumption have conspired against her,” Andrew Wishart, senior U.K. economist at Berenberg Bank, said in analysis Monday.

“Without spending cuts or tax rises, the OBR would forecast the government missing its fiscal rule of funding day-to-day spending entirely with tax revenue by 2029-30. To avoid six months of speculation about how Reeves will make up the shortfall in the next fully-fledged budget in the autumn, the chancellor must act now,” he added.

The UCLA Anderson Forecast, citing substantial changes to the economy from policies of the Trump administration, issued its first-ever “recession watch” on Tuesday.

UCLA Anderson, which has been issuing forecasts since 1952, said the administration’s tariff and immigration policies and plans to reduce the federal workforce could combine to cause the economy to contract. 

Its analysis was titled, “Trump Policies, If Fully Enacted, Promise a Recession.”

“While there are no signs of a recession happening yet, it is entirely possible that one could form in the near term,” stated a news release from the forecaster. 

U.S. recessions are only officially declared by the Business Cycle Dating Committee of the National Bureau of Economic Research. The committee employs a variety of indicators, including production, employment, income and growth to determine if the economy is contracting. At the moment, none of the specific indicators look to be near levels that would prompt the committee to declare recession. 

The average respondent to the CNBC Fed Survey for March, published Tuesday, forecast a 36% recession probability in the next year, up from 23% in the prior month. But it remains well below the 50% level that prevailed from 2022 and 2023 in the wake of the pandemic and turned out to be wrong. That shows how difficult it is to predict a recession, or even determine if the economy is in one. The Fed Survey also shows that a recession is not the base case for most Wall Street forecasters, only that the concern is somewhat elevated.

Recessions occur when multiple sectors of the economy contract at the same time. The UCLA Anderson Forecast said reductions to the workforce from the administration’s immigration policies could create labor shortages, tariffs will raise prices and could lead to a contraction in the manufacturing sector while changes to federal spending will reduce employment for government workers and private contractors.

“If these and their consequent feedback into the demand for goods and services occur simultaneously, they create a recipe for a recession,” the statement from the forecaster said.