In a leaked memo Bank Of America’s executive branch declares that “we hope” working Americans will lose leverage in the labor market, reports The Intercept.
The organization’s head of global economics research at Bank of America Securities, Ethan Harris, penned the letter, titled “Mid-year evaluation,” on June 17.
The Intercept reported:
The memo comes as the Federal Reserve attempts to “cool down” the economy, largely on the basis of the same justification—that rising wages are fueling inflation. The Fed raised interest rates this year for the first time since 2018. This has frequently resulted in recessions in the past, and it certainly seems to be the case right now: The Commerce Department reported on Thursday that the gross domestic product fell for the second consecutive quarter, suggesting that a recession may have already begun.
At the time the memo was released to clients, the mid-year review’s emphasis on an impending recession in particular drew news attention. The document has never been published in its entirety before.
The memo stated that Bank of America executives “hope the ratio of job openings to unemployed is down to the more normal highs of the last business cycle”
“The ratio of job opening to unemployed” is calculated by the ratio of unemployed people to job openings, which means the lower the number of unemployed, the more job opportunities.
The executives also expresses their distress about “a record tight labor market,” stating that “wage pressures are…going to be hard to reverse.”
The letter refers to an earlier Bank of America report from 2021 that expressed concern about “very strong momentum in the labor market, suggesting the economy would not just hit but blow through full employment. Fast forward to today, and these trends have been worse than expected.” These trends have been worse than anticipated as of late, the Intercept added.
Thanks to President Joe Biden and the Democrats the market is starting to price in the chances of interest as an economic downturn takes hold.
While clearly complaining about the effects of higher wages raising prices, Bank of America is silent on the effects of high profits. The leaked memo depicts how economic institutions are clearly against the thought of the working class power.
Read it here: The Intercept