Bank of America CEO says stressed consumers are turning into a nation of bargain hunters, and companies are slashing prices to respond

American consumers are in open revolt against corporate inflation, forcing companies to cut prices if they still want their business.

Speaking further Face the Nation On Sunday, Bank of America CEO Brian Moynihan warned that households continue to travel on vacation, go to the movies and dine out, but are no longer willing to splurge now that their nest egg is shrinking . The post-pandemic retaliatory spending that has turbocharged US growth for the past two years has given way to a nation of coupon clippers.

“I basically find bargains,” the CEO of the world’s second-biggest lender by market capitalization said in the interview. “And you see corporations cutting prices to respond to that.”

This suggests that executives have gone too far in raising prices to cover their profits, a phenomenon known as “greed.” A recent study analyzing US Commerce Department data found that corporate profits drove 53 percent of inflation in the second and third quarters of last year.

According to Moynihan, Bank of America’s 60 million retail customers are spending 3 percent more than they did at this time last year, but that growth rate is half of what it once was in the wake of the pandemic.

Instead, he said the figure is more in line with the pace seen during the Trump administration, years before the COVID outbreak. Despite the problem of greed, many households have preserved their purchasing power by transferring spare cash into interest-bearing accounts, which in some cases yield 5%.

“They still have a lot more — even a lot more adjusted for inflation — in their account,” the Bank of America CEO said. “The problem is that it has started to decline, which indicates that they are now using that money to maintain a lifestyle.”

The bank could not immediately be reached wealth for additional comments.

Once households go into hibernation, it’s hard to wake them up

With frustrated consumers sharing photos of their shopping receipts online, brick-and-mortar retailers have been forced to respond with promotions to maintain foot traffic.

Starting this season, for example, Walgreens launched a “Summer of Savings” that included price cuts on 1,300 items.

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“Walgreens understands that our customers are under financial strain and are struggling to purchase everyday essentials,” it explained in late May, justifying the move.

But following peers including Walmart and Target and even discounter Aldi, parent company Walgreens Boots Alliance ended up having to cut its full-year earnings forecast just weeks later.

Management blamed this kind of promotional activity for the downbeat outlook and predicted further headwinds would persist in its upcoming fiscal year 2025. Its shares lost nearly a quarter of their value immediately after the profit warning and are now trading at lows not seen since 1997.

Fast-food restaurant chain McDonald’s also complained that price increases on key menu items did not offset a decline in consumer visits, leading to a slight decline in same-store sales in its US home market.

In his interview with Face the NationMoynihan said his bank’s economists do not currently foresee a recession next year. However, he advised the Federal Reserve to start easing the brakes.

The Bank of America CEO anticipates a series of eight cuts through the end of 2026, half of which he sees coming next year. That would push Fed funds rates down 2 percentage points to 3%-3.5%, he said, a rate he called normal in the new higher environment for longer.

With no imminent signal from the Fed that help will come in the form of lower borrowing costs, there are fears that households could go into full hibernation.

“Once the American consumer really starts to be very negative,” he said, “then it’s hard to get them back.”

This story was originally featured on Fortune.com