Wall Street has spent most of the year hedging on U.S. growth, with a few research desks still carrying recession language - and Bank of America just walked the other way.
CEO Brian Moynihan now expects the economy to grow 2.8% in 2026, a bigger call than most of his peers are willing to print. He delivered the upgrade from Davos in an interview with Fox Business this week.
The bank's research team lifted its forecast from 2.6% to 2.8%, with Moynihan pointing to spending and credit data through the first weeks of January as stronger than expected. He said there were "more good things" happening in the economy than his team had assumed earlier in the year.
Client activity is the second piece of the picture, since BofA can see real-time flows across retail, wealth, and corporate accounts that most economists can't. By Moynihan's read, those internal numbers are still pointing up.
A 2.8% GDP print, if it lands, is a real gap above the consensus most analysts have been carrying. Faster growth typically means stronger corporate earnings, which tends to feed into more support under stock prices.
The catch: the same growth Moynihan is calling for is exactly the kind of data that gives the Fed cover to wait. Markets have been pricing in cuts later this year, and a 2.8% economy makes that math harder for the doves.
Moynihan also pointed to the federal tax law passed last year as part of the story, suggesting it has been more supportive of growth than many analysts initially modeled. That puts a fiscal tailwind into the 2026 picture that was not fully priced in three months ago.
Faster growth tends to lift different parts of the market in different ways. Financials, industrials, and consumer discretionary names usually benefit when GDP runs hot, since those companies earn more on every additional dollar moving through the economy.
Rate-sensitive corners like REITs and high-multiple tech, on the other hand, can struggle if hotter data keeps the Fed on hold longer than markets currently expect.
Big-bank earnings are usually one of the first places economic stress shows up, through rising loan losses, slowing card spending, or weak deposits. So far none of those red flags are flashing across the major banks.
The same week BofA raised its forecast, the company also announced its ninth straight year of stock awards to nearly all employees, with the latest round totaling about $1 billion. Companies don't make that move when they're worried about the next 12 months.
The Fed meets this week, with Q1 GDP and March PCE inflation set to drop alongside. Those prints will tell investors whether Moynihan is early or right, and whether the rest of Wall Street has to catch up.
He is betting on the consumer. His team saw enough in the first weeks of January to move the call before anyone else did.