Bank of America CEO sees at least 10% drop in Q3 investment banking fees

He said the deals pipeline remains strong, but cautioned if interest rates go up, that will slow down some of the financing demand.

"Right now we're seeing it solid, and the pipelines are staying full," Moynihan said.

Global brokerages expect the Federal Reserve to raise interest rates this year after stronger-than-expected inflation readings reinforced bets that policymakers will keep tightening monetary policy.

Moynihan said consumers are still spending and credit quality has been as good as "it's been (for) a long time."

"We feel very good about the underlying U.S. economy," he said.

NEW YORK, Sept 14 (Reuters) - Bank of America expects its investment banking fees to drop by at least 10% in the third quarter, while sales and trading revenue will be flat, CEO Brian Moynihan said on Monday.

Shares of BofA extended losses after his comments, dropping over 5% by late afternoon trade. The S&P 500 banking index .SPXBK was down 2.7%.

Moynihan projected investment banking revenue to be between $1.6 billion and $1.8 billion in the third quarter, down from $2 billion in the same period a year earlier.

"What we're seeing is the market generally in investment banking is down 10% or so," he said at the Barclays global financial services conference.

"We're down to small position in some of the businesses that had more activity, so we'll be down probably a bit more than that."

Moynihan said he expects sales and trading revenue to be roughly flat in the third quarter, versus $5.4 billion in the third quarter of 2025.