Bank of America's research team raised US GDP forecast to 2.8% for 2026, citing the settling in of Trump administration policies (trade/tariffs, tax, immigration, deregulation) as key drivers after an initial post-election dip.

Consumer spending remains strong, with $4.5 trillion from 70 million consumers, growing about 5% year-over-year in Q4 and continuing into January.

Markets business had 15th consecutive quarter of year-over-year growth, up 10% in Q4. Investment banking had a strong Q4, making 2025 the second-best year for fees in company history.

Consumer spending levels are inconsistent with feeling threatened; all income groups are growing, with middle and upper growing faster. Inflation memory is the key affordability issue, not current wage growth.

Warns of 'equal and opposite reaction': a hard cap could reallocate credit, slow spending, and reduce credit availability, counter to the goal. Suggests exploring limited, targeted solutions instead.

Labor availability is a concern due to population growth and immigration policy uncertainty, as reflected in small business surveys.

On AI and hiring: Bank of America hires ~65,000 people annually to manage turnover and growth. Technology (AI + alerts) drives productivity, allowing transaction volume to triple while reducing headcount in certain areas.

Relationship is good; they continue to provide ideas. Administration is trying to figure out how to make America more affordable.