Bank Of America CEO Warns Of Consumer Discontent If Fed Delays Rate Cuts
![Bank of America Chief Executive Brian Moynihan looks on during an interview in Hong Kong](https://d.ibtimes.com/en/full/3819957/bank-america-chief-executive-brian-moynihan-looks-during-interview-hong-kong.jpg?w=736&f=5a0fc3b05f8235ba1a81c8961f0ab5a1)
Bank of America CEO Brian Moynihan expressed concerns on Sunday that U.S. consumers might lose confidence if the Federal Reserve does not begin lowering interest rates soon.
Speaking in an interview with CBS, Moynihan said that while the Fed has maintained its policy rate in the 5.25%-5.50% range since July, a reduction could be necessary as early as September if inflation continues to ease.
"They've indicated that rates are unlikely to rise further, but if they don't start reducing them soon, it could dampen the mood of American consumers," Moynihan said.
"People are still going to restaurants and they're taking travel, but on the other hand, they're spending a little bit less, which means they're basically finding bargains. And you're seeing corporations cut price to respond to that.
"And so it's the way the economy works and it's slowing down, and that's where we have to be careful, because we've won the war on inflation, it's come down. It's not where people want it yet, but we got to be careful that we don't try to get so perfect that we actually put us in recession."
He added that once consumer sentiment turns negative, it can be challenging to reverse the trend.
When asked about Donald Trump's recent comment suggesting that presidents should influence Federal Reserve decisions, Moynihan responded that while people are entitled to offer advice to Fed Chair Jerome Powell, it's ultimately Powell's responsibility to make the final decision.
"I feel the president should have at least say in there," Moynihan said.
"In my case, I made a lot of money, I was very successful, and I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman.
"I think if you look around the world's economies and you see where Fed central banks are independent and operate freely, they tend to fare better than the ones that don't. And so I think that that's kind of the American way. It's been that way. Does that stop people from giving Chair Powell advice, or other people? No, I give him advice. So we all give him advice. And so I think he ought to be careful.
"He gets lots of advice about where rates should go. So there's a lot of people that have a view of it, but their job is to sort through it all and say what's best for the US economy on those two dimensions you talked about and be consistent."
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