Bank of America CEO calls for Fed to start cutting rates via Investing.com

In a recent interview on CBS News’ “Face the Nation,” Bank of America CEO Brian Moynihan urged the Federal Reserve to consider cutting interest rates to prevent a potential economic downturn.

Highlighting trends in consumer spending, Moynihan noted a significant slowdown in growth.

“In our consumer base of 60 million customers who spend every week, what you’re seeing is that they’re spending at a growth rate this year over last year, for July and August so far, of about 3%. That’s half the rate it was last year at this time,” Moynihan told CBS News on August 11.

He pointed out that while consumers still have money in their accounts, they are “draining a bit,” suggesting they are using savings to maintain their lifestyles, especially in the summer months.

Addressing the Federal Reserve’s approach, Moynihan cautioned against keeping rates high for too long.

“We’ve won the war on inflation, it’s come down. It’s not where people want it yet, but we have to be careful that we don’t try to be so perfect that we actually put ourselves in a recession,” he told the CBS host.

He advocated for a more accommodative monetary policy, saying: “I think now, it’s time for them to start accepting — to become a little more accommodative and loosen the restrictions and let the thing cool down.”

He added: “They’ve told people that tariffs probably won’t go up, but if they don’t start lowering them relatively soon, you could discourage the American consumer.”

When asked about political influences on the Federal Reserve, particularly in light of former President Donald Trump’s recent comments suggesting greater presidential control over the Fed, Moynihan defended the institution’s independence.

“I think if you look around the economies of the world and see where the central banks of the Fed are independent and operate freely, they tend to do better than the ones that don’t,” he noted.

Moynihan concluded by acknowledging the multitude of advice the Fed receives, including his own. “I think a strong central bank needs to take all this advice and process it,” he said, stressing the importance of the Fed’s autonomy in dealing with economic challenges.