HEY, BIG SPENDERS

Rich Americans Continue Borrowing Amid Inflation and Recession Fears

The wealth-management units at Morgan Stanley and Bank of America charted double-digit growth in the year's second quarter.

America’s rich only got richer during the pandemic, and it seems that the current economic turbulence may serve to benefit them more. Though the recent economic news has sounded a steady drumbeat of doom—inflation keeps rising, stocks keep wavering—wealthy Americans increased their borrowing rates during the first half of this year.

At Morgan Stanley and Bank of America, wealth-management units recorded multi-digit loan growth in the second quarter. As The Wall Street Journal reported, the growth signifies that wealthier American consumers are not preparing for a recession, or at least not acting like it; on earnings calls, banks’ leaders said that borrowers are spending at a typical pace and staying on top of their debt payments. “Volatility and market decline are when the wealthy make their money,” Mike Kosnitzky, co-head of the private-wealth practice at a law firm, said. “This is a buy time.”