Bank of America CEO says US consumers could become discouraged unless rates drop soon

Bank of America CEO says US consumers could become discouraged unless rates drop soon

At the end of July the Fed kept the policy rate in the same 5.25%-5.50% range it has been for more than a year, but signaled that a rate cut could come as soon as September if inflation continued to cool.

“They’ve told people rates probably aren’t going to go up, but if they don’t start taking them down relatively soon, you could dispirit the American consumer,” Moynihan told CBS in an interview.

“Once the American consumer really starts going very negative, then it’s hard to get them back.”

© Reuters. FILE PHOTO: A person pushes a shopping cart in a supermarket in Manhattan, New York City, U.S., March 28, 2022. REUTERS/Andrew Kelly

Moynihan, pressed about Republican candidate Donald Trump’s statement that presidents should have a say over Fed decisions, said people were free to give Federal Reserve Chair Jerome Powell advice and it was then his job to decide what to do.

“If you look around the world’s economies and you see where central banks are independent and operate freely, they tend to fare better than the ones that don’t,” he said.

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