Bank of America Corp.’s CEO Brian Moynihan says he doesn’t see a recession in the offing because the U.S. consumer remains healthy.

‘But what’s going to make that happen is the underling U.S. consumer. And the underlying consumer is doing well and making more money, they’re employed; and more importantly, they are spending more money.’

Brian Moynihan, Bank of America CEO

The Wall Street chieftain’s comments, which aired on CNBC on Wednesday, come as investors have been fretting about the health of the U.S. economy with the Trump administration has been locked in a yearlong battle with China over trade policy.

The dispute, centered on import duties, has raised the chances that a recession could grip the domestic economy soon, elevating anxieties in financial markets. However, Moynihan said that a yield-curve inversion, which occurred briefly last Wednesday between the closely watched yields for the shorter-dated and longer-dated government bonds, doesn’t necessarily signify that a recession is imminent.

The U.S. 2-year Treasury note yield

TMUBMUSD02Y, +2.15%

briefly traded above the 10-year Treasury note yield

TMUBMUSD10Y, +0.33%

for the first time in over a decade, a condition that has preceded the last seven recessions.

“Look, when the yield curve moved around the pundit-ocracy got going, saying, ‘Here, this means a recessions coming,’” Moynihan told CNBC.

However, the bank boss said this time the recessionary gauge may be influenced by a global market swirling in some $15 trillion in negative interest rates.

Check out: After the yield curve inverts — here’s how the stock market tends to perform since 1978

“But if you actually think about it, there could be two reasons that the yield curve is moving around and you’re seeing that debate take hold,” he said.

“Which in part is the flight to quality. 80 – 90% of all the yield in the world is available in the United States. So, the money comes flying here because you’re gonna give your money to someone — a thousand dollars — and they give you back less in 10 years ? Or you’re gonna give your money to someone — a thousand dollars — and they give you back more in 10 years?. And so, that’s why there’s a great debate about that,” the Bank of America CEO said.

Moynihan said the debate about the U.S. economy’s trajectory comes down to the consumer.

“And so in our customer base through this time Aug. 15 year to date, you’ve seen the amount spent by American consumers at Bank of America: $2 trillion,” he said.

“It’s up 5.9% from last year through the same period of time. So, in [2017-18] you’re up about 8.5% and 2018-19 up 5.9%. So, think about that as $120 billion more spending by our consumers this year versus last year, which means the U.S. consumer continues to spend and that will keep the U.S. economy in good shape,” Moynihan explained.

According to the Bureau of Economic Analysis, consumer spending makes up 68% of the U.S. economic activity.

Moynihan’s sanguine view of the consumer also comes as the Dow Jones Industrial Average

DJIA, +1.06%,

the S&P 500 index

SPX, +0.87%

and the Nasdaq Composite

COMP, +0.97%

were enjoying a brisk run-up on Wednesday at least partly on the back of upbeat earnings from retailers Target Corp.

TGT, +19.31%

and Lowe’s Cos.

LOW, +10.05%,

viewed as a further indication of the health of consumers.

Check out the nearly 14-minute CNBC interview below:

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