U.S. consumers and businesses alike have turned cautious about spending this year because of elevated inflation and interest rates, according to Bank of America CEO Brian Moynihan.

Whether it’s households or small- to medium-sized businesses, Bank of America clients are slowing down the rate of purchases made for everything from hard goods to software, Moynihan said Thursday at a financial conference held in New York.

Consumer spending via card payments, checks and ATM withdrawals has grown about 3.5% this year to roughly $4 trillion, Moynihan said. That’s a sharp slowdown from the nearly 10% growth rate seen in May 2023, he said.

“Both of our customer bases that have a lot to do with how the American economy runs are saying, ‘You know what? I’m being careful, slowing things down,’” Moynihan said, referring to consumers and businesses.

The slowdown began last summer and is consistent with the “very low growth” environment of the period from 2016 through 2018, he said.

Nearly a year after the last Federal Reserve rate increase, consumers and businesses are wrestling with inflation and borrowing costs that remain higher than they are accustomed to. The Fed began efforts to tame inflation by hiking its benchmark rate starting in March 2022, hoping it could slow the economy without tipping it into recession.

Many economists believe the Fed is on track to pull off that feat, which has helped the stock market reach new highs this year. But consumers are still grappling with higher prices for goods and services, and that has impacted U.S. companies from McDonald’s to discount retailers as Americans adjust their behavior.

Food shoppers are hitting up more store locations in search of deals, according to Moynihan. “They’re going to three grocery stores instead of two, is one of the stats we see,” he said.

The now-tepid growth in overall spending is being propped up by travel and entertainment, while “other things have moderated, except for insurance payments,” Moynihan said. Growth in rent payments has slowed, he noted.

“We’ve got to keep the consumer in the game in the U.S. economy, because [they’re] such a big part of it,” Moynihan said. “They’re getting a little more tenuous, and that is due to everything going on around them.”

The same is true for small- and medium-sized businesses, the Bank of America CEO said. His company is the second-largest U.S. bank by assets, after JPMorgan Chase. Moynihan and other bank CEOs have a bird’s-eye view of the economy, given their coast-to-coast coverage of households and companies.

Business owners are saying, ”‘I still feel good about my overall business, but I’m not hiring as much. I’m not buying equipment as fast. I’m not making software purchases as fast,’” Moynihan said.

The bank’s economists believe that inflation will take until the end of next year to get under control and that the Fed will begin cutting interest rates later this year, Moynihan said. The U.S. economy will probably grow at around a 2% level, avoiding recession, he added.

Nissan has issued a ‘do not drive’ warning for about 84,000 older-model vehicles because they carry recalled Takata-made airbags.

The warning affects certain model year 2002-2006 Nissan Sentra, 2002-2004 Nissan Pathfinder and 2002-2003 Infiniti QX4 vehicles.

The National Highway Traffic Safety Administration instructed drivers in a release not to drive an affected vehicle until a repair is completed and the defective air bag is replaced.

First announced in 2013, the Takata air bag recall remains the largest, and one of the deadliest, in history. The NHTSA has confirmed 27 people in the U.S. have been killed by defective Takata air bags that exploded, while at least 400 people have been injured.

Takata filed for bankruptcy protection in 2017.

A top McDonald’s executive is weighing in on claims that the company has jacked up its prices.

Joe Erlinger, president of McDonald’s USA, said in an open letter Wednesday that the average price of McDonald’s menu items is up around 40% since 2019. The breakdown comes in response to claims on social media from House Republicans, among others, that the fast-food company upped prices by more than 100%. 

“Americans across the country are making tough calls about where to spend their hard-earned money,” Erlinger said. “And while we’ve been working hard to make sure our fans have great reasons to visit us, it’s clear that we — together with our franchisees — must remain laser-focused on value and affordability.”

Erlinger said the average price of a Big Mac meal today is $9.29, up 27% from $7.29 in 2019. The price for a 10-piece McNuggets meal is up 28% over the same period, and the price of medium french fries increased 44%.

Erlinger added the cost increases are tied to similar increases in input costs such as crew salaries and cost of goods.

“For a brand that proudly serves nearly 90% of the U.S. population every year, we feel a responsibility to make sure the real facts are available,” Erlinger said.

Consumer prices have increased 3.4% over the past year, according to the latest data from the Bureau of Labor Statistics. In response to persistently steeper costs, some consumers are pulling back across the restaurant industry, a trend that has not spared the fast-food giant.

McDonald’s recently reported same-store sales below expectations in its first-quarter earnings report. The company will also soon offer a $5 value meal for roughly a month, beginning June 25.

That offering will include a McChicken or McDouble, four-piece chicken nuggets, fries and a drink, CNBC previously reported.

Analysts at BTIG characterized the promotion as being more about value perception than a profit driver.

“In our view, this new deal is more about value perception, seeking to change the media narrative around McDonald’s recent price hikes to refocus around a deep(er) value offering. We believe the new one-month meal deal could actually hurt sales (check decline) and margins, but help reinstate McDonald’s as a value leader in the industry,” the analysts said in an investor note.

An independent advocacy group of McDonald’s franchisees is pushing to make the discounted offering sustainable for operators, saying it will require greater investment from the company if it sticks around menus beyond the initial monthlong run.

“There simply is not enough profit to discount 30% for this model to be sustainable. It necessitates a financial contribution by McDonalds,” the board of the National Owners Association wrote in a letter to membership that was viewed by CNBC.

— CNBC’s Kate Rogers contributed to this report.

Orange juice prices have climbed to fresh all-time highs amid persistent supply constraints, pushing the industry into crisis mode and forcing some makers to consider alternative fruits.

Prices of the breakfast staple have been climbing rapidly in recent years, partly driven by declining output in Florida — the main producer of orange juice in the U.S. — and climate-fueled extreme weather in the main orange producing areas of Brazil.

The South American agricultural powerhouse is the world’s largest producer and exporter of orange juice, which means it plays a hugely influential role in shaping the global industry.

The benchmark frozen concentrated orange juice futures, traded on the Intercontinental Exchange in New York, closed at $4.77 per pound on Wednesday. That’s nearly double the price registered a year ago.

Harry Campbell, a commodity market data analyst at research group Mintec, said that soaring orange juice prices have forced manufacturers and blenders to adapt to the situation by considering alternative fruit juices.

“A lot of them will be changing the quantities of juice they are putting in their blends to drop the orange juice and increase other juices, such as pear juice, apple juice, grape juice, so they are less reliant on the orange juice,” Campbell told CNBC via telephone.

“It does seem like this [situation] is going to be here for the longer term,” he added, noting that some players in the orange juice market had observed a large drop in demand year-over-year.

“Until that point is reached where consumers are no longer willing to pay the premium for orange juice, because it is at such low supply, prices will continue to drive up,” Campbell said.

Research center Fundecitrus warned recently that excessive heat in Brazil last year meant the South American country was likely on track to register one of its worst orange harvests in more than three decades.

In a report published on May 10, the citrus growers organization forecast that Brazil was set to produce 232.4 million boxes of oranges (each weighing approximately 40.8 kilograms) in the 2024 to 2025 season. That represents a 24% decline when compared to the previous cycle.

Analysts say Brazil typically produces about 300 million boxes of oranges each cycle, although climate change has dramatically reduced crop production. Climate change is making extreme weather events more frequent and more intense.

Fundecitrus said a series of intense heatwaves in Brazil occurred at a critical phase of flowering and early fruit formation between September and November last year, substantially hampering production.

A citrus disease known as greening, a tree disease with no known cure that results in bitter, stunted fruit, has been another headwind for orange farmers. Analysts have warned that the problem is likely to wreak havoc in orange groves across the world for some time to come.

“Orange Juice prices are rising because of the three Ds: Drought, Disease [and] Demand,” Dave Reiter, a trader with Reiter Capital Investments LLC, told CNBC via email.

“When most people think of orange juice production, they think of Florida and California. Actually, Brazil is the largest producer of oranges and orange juice,” Reiter said.

“The majority of Brazil’s orange juice production occurs in Sao Paulo and Minas Gerais. These two areas have been struggling with weather problems and disease for the past few years.”

Reiter described the benchmark orange juice futures contract as a thinly traded market, which means it can lead to bouts of “substantial volatility.” He estimated that the next orange juice price target was $5.16 per pound.

The Internal Revenue Service announced Thursday that its experimental Direct File free tax-filing option for simplified tax returns would become a permanent option starting next year.

In a release, the IRS, along with the U.S. Treasury Department, said its Direct File pilot program, which rolled out on a limited basis earlier this year, saw 140,000 taxpayers claim more than $90 million in refunds and save an estimated $5.6 million in filing costs.

“President Biden is committed to saving Americans time and money and ensuring families receive the tax benefits they’re owed. Providing a free tool to all Americans who want the option to file directly with the IRS is key to achieving those goals,” said U.S. Secretary of the Treasury Janet L. Yellen in a statement.

“After a successful pilot, we are making Direct File permanent and inviting all 50 states to offer this free filing option to their residents. The Treasury Department and IRS look forward to working with states to expand Direct File to Americans across the country.”

Direct File is designed for filers with relatively straightforward tax returns — like W2s or Social Security income — and who take the standard deduction. Other types of income, like those from gig work or other business returns, are not eligible.

Direct File is not a required government program, and does not replace existing filing services.

But advocates have long called for a program to reduce or even eliminate the cost of filing, especially in the digital age.

“President Biden is focused on lowering costs and making the tax system fairer for Americans, and that includes providing a free and simple way to file taxes, with no expensive and unnecessary filing fees and no upselling,’ National Economic Advisor Lael Brainard said in a statement.

Brainard applauded Biden, saying the administration’s ‘investment in modernizing the IRS is already paying off, and we’re looking forward to this resource being available to more Americans across the country.”

For filers subject to state income taxes, their states must opt-in to Direct File. Twelve states have already signaled opposition to doing so, echoing complaints by TurboTax parent Intuit that Direct File is a waste of taxpayer resources.

But a survey released by the White House showed 90% of respondents ranked their experience with Direct File as “excellent” or “above average.”

“The numbers speak for themselves: the Direct File Pilot was a success, saving American taxpayers countless hours and millions of dollars filing their taxes,’ said White House Deputy Chief of Staff Natalie Quillian in a statement. ‘Now, we’re bringing the program to a national audience. It’s just one more example of how President Biden’s Investing in America agenda is lowering costs for communities across the country.”