But that sort of allows us the room to use our good operational excellence, take out expenses and replace them with things like revenue-related expenses that we’ve seen. And we see that pattern reemerge now as we gotten stability and past the pandemic and past the great resignation and all the inflation that occurred in that — in the ’21/’22 time frame, we now stabilize back to that ability to produce sequential declines in quarters during the year — year-over-year growth of inflationary 1% to 2% levels. And that gets you in that low 64s.
Erika Najarian: Thank you, Brian.
Operator: We’ll take our next question from John McDonald of Autonomous Research.
John McDonald: Hi, Alastair, Brian. Alastair, I wanted to go back on the NII and maybe you could help us. It’s so hard for us to square the NII outlook with the rate sensitivity disclosure that you have in the slide with the 100 basis point parallel shift down is $3.1 billion. Maybe just, is there some caveats about how in the real world it doesn’t play out like the disclosures? We’ve already seen rates come down on the long end, almost 100 basis points. So I guess it just — where’s that $3.1 billion headwind in your number? Because it’s very impressive, obviously, to be able to kind of keep it flat despite that, using the forward curve. Thanks.
Alastair Borthwick: Yeah, well, I mean, I think that the main thing is, number one, it obviously assumes a parallel shift instantly. So — the rate cuts that are in the forward projections, the earliest one comes March, for example. So you’re not going to see a full year’s worth of rate cuts all in the space of the first day or so. It doesn’t work out that way. So, John, I think the way to start would be just use what we’ve disclosed, which is that $3.1 billion. You can see what we say in terms of how much of that is the short end. And then I just take that number and use that as the beginning point. And just keep in mind, we still see some deposit growth, some loan growth, and some securities and loan repricing that offsets all that.
John McDonald: Okay. Okay. That’s helpful. And then maybe just on top of that, trading NII or the global markets NII, is that likely to be a headwind or a tailwind in ’24 versus ’23? Is that — do you have any visibility on that?
Alastair Borthwick: Yeah. Well, look, if you look at global markets, in any given quarter, it moves around just based on the customer behavior. But over the long arc, if you look over the course of the past two or three years, it’s liability sensitive. So I’d expect if you see rate cuts that’ll benefit global markets NII just a little bit. And you can almost like — if you think about just retracing the steps of what they’ve conceded in NII, you’d sort of expect to get that back over time.
John McDonald: Okay. So maybe that could grow a bit.
Brian Moynihan: John, this quarter was a drop, third quarter, fourth quarter, a pretty good amount. And so — and that’s partly due to the fourth quarter being lower activity, just lower inventory carry and things like that. That reversed itself and we’re off to a good start so far in the first quarter here and the balance sheet moves back up. So there’s a little bit of quarter-to-quarter linkage third to fourth quarter typically.
John McDonald: Okay, got it. Thanks, guys.
Operator: We’ll take our next question from Mike Mayo of Wells Fargo.
Mike Mayo: Hi. Just another follow-up on NII. I guess if you take the Fed dot plot, maybe there’s just three rate cuts. If you take that instead of the six, what would — how would you be thinking about NII change?
Alastair Borthwick: I think if we got the three rather than the six, Mike, we’d do modestly better, I think. Let me put it this way. If we hadn’t seen the three more since last quarter, we might have a higher guide, but — because we’ve come off of a base with better deposit gathering in Q4, so we’re starting in a better place. So those two things have sort of evened themselves out. But obviously, if it pushes out later, that’s a good thing for us.
Mike Mayo: Brian, Alastair, you always talk about the information advantage you have by just being in the flow of so much of the US economy. What do you think, I mean, is this — and not relying — I know you like relying on your research group, Brian, and what their economic forecast is, but what do you guys think as far as, are we going into a recession the second half this year? Does the Fed need to cut six times? Are you seeing that? Where are you seeing the most softness, I guess, is the question.
Brian Moynihan: So I think our research team has rate cuts in next year and has a soft landing, as you referenced, Mike. So that’s it. As you see the customers today, as I said earlier, the year-to-year spending growth in the fourth quarter versus last year’s fourth quarter, or in the first quarter so far, versus the first part of last year is a 4% to 5% rate in movement of money. And that was across $4 trillion plus out of the consumer accounts in Bank of America into the economy. That 4% to 5% is similar to what it was in ’17, ’18, ’19 when the Fed rose — took rates up, inflation was under control and economy was growing at 2% — 1.5%, 2%, 2.5%. And so the spending level should sustain an economy, albeit our core prediction is it’s slowing down from a higher growth rate in the third quarter, 4.5%, 5%, whatever it was, down to a percent or something like that in the first couple of quarters next year.
