Bank of America CEO says squeezed consumers are turning into a nation of bargain hunters and companies are cutting prices to respond

American consumers are openly rebelling against corporate inflation, forcing companies to lower their prices if they want to remain customers.

Talking about Take on the nation On Sunday, Bank of America CEO Brian Moynihan warned that households are still going on vacations, going to the movies and eating out, but they’re no longer willing to splash out as their savings shrink. The post-pandemic revenge spending that boosted U.S. growth over the past two years has been replaced by a nation of coupon clippers.

“They’re basically finding bargains,” the CEO of the world’s second-largest lender by market capitalization said in the interview. “And you’re seeing companies cut prices to respond to that.”

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

Bank of America’s 60 million retail customers are spending 3% more than this time last year, Moynihan said, but that’s half of what it was post-pandemic.

Instead, he said, that figure is much more in line with the pace seen during the Trump administration years before the COVID outbreak. Despite the greedflation problem, many households have maintained their purchasing power by shifting excess cash into interest-bearing accounts that yield 5% in some cases.

“They still have a lot more in their account, even after adjusting for inflation,” the Bank of America CEO said. “The problem is that it started to come down, which indicates that they are now using that money to support a lifestyle.”

The bank was not immediately reachable Fortune for further comment.

Once households go into hibernation, it is difficult to wake them up

As frustrated consumers share photos of their groceries online, brick-and-mortar retailers are forced to respond with promotions to maintain customer base.

For example, Walgreens launched a “Summer of Savings” this season, with price cuts on 1,300 items.

The story continues

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

But following the lead of other competitors including Walmart, Target and even discounter Aldi, parent company Walgreens Boots Alliance had to cut its full-year profit forecast a few weeks later.

Management blamed such promotional activity for the bleak outlook and predicted further headwinds would remain through the upcoming 2025 fiscal year. The shares lost nearly a quarter of their value immediately after the profit warning and are now trading near lows not seen since 1997.

Fast-food restaurant chain McDonald’s also complained that price increases on key menu items failed to offset the decline in customer visits, leading to a slight decline in sales at comparable stores in the U.S. market.

In his interview with Take on the nationMoynihan noted that his bank’s economists are not currently predicting a recession next year. Nevertheless, he advised the Federal Reserve to ease off the brakes.

Bank of America’s CEO expects a series of eight cuts through the end of 2026, half of which he expects next year. That would lower the Fed funds rate by 2 percentage points to 3%-3.5%, he said, a rate he called normal in the new, longer, higher environment.

If there is no signal from the Fed that relief is coming in the form of lower borrowing costs, he fears households could go into total hibernation.

“If the American consumer gets really negative,” he said, “it’s hard to get them back.”

This story originally appeared on Fortune.com