Those hoping that interest rates might come down sooner rather than later are likely to be disappointed, according to the CEO of Bank of America, who predicts the figure won’t begin to dip for at least another 12 months.

Rates currently sit at 4.75%—it hasn’t been this high since 2007—and yet most commentators are expecting the Fed to hike rates at least once more this year.

Brian Moynihan, boss of BofA, expects the levels to drop only in the second quarter of next year.

Speaking at the Financial Review's business summit in Australia on Tuesday, Moynihan explained: “They’re going to have to hold it there for a long time, because frankly, the labor market is still very tight, despite what you hear about layoffs, and financial conditions are strong, so companies have access to capital, albeit at higher costs.”

This comes after BofA analysts warned that the Fed will have to hike rates to the “point of pain” if inflation is going to be brought back to the 2% year-on-year growth target.

Moynihan revealed that consumers had thus far been undeterred by the rate increases and that spending actually increased in January and February.

He added consumers still “have money in their accounts,” which could eventually twist the Fed’s arm into action.

“Our base projection is for a recession to occur in the U.S. economy beginning in the third quarter of 2023, occur through the fourth quarter of 2023, and into the first quarter of 2024,” he said.

The economy will contract between 0.5% and 1% each quarter, he added, resulting in a “very slight recession in the scheme of things.”

The slowdown will be so mild that a “lot of people are not going to see that much of it,” he explained, framing the issue as a “technical” recession as opposed to a “deep drop.”

Engineering a hard landing

The above might suggest that Moynihan is hoping for a so-called soft landing for the economy. However, other top economists have said a hard landing is inevitable and may even need to be engineered.

“I think the Fed has no choice but to engineer a hard landing,” said TD Securities strategist Priya Misra in an interview with CNN on Monday.

“I think the big macro question is, ‘Is the data strong because the Fed has not restricted enough, or the lags have just not worked through?’ We’re in the lags view. I think, if you look at interest rates, they became restrictive, I would argue, in December last year. We’re two months out.

“It takes a while—12 to 18 months—for the lags to kick in. I would argue that the Fed policy is restrictive already, and the Feds will continue to hike.

“It might stop somewhere between 5.25% and 5.75%—maybe they have to go a little bit higher. I think what the market’s done is look to the strong data and assume that we’re going to have no landings.”

This story was originally featured on Fortune.com

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