Brian Moynihan Says US Economy Is 'Much Bigger' Than Fed: 'There's Too Much Fascination...'

Bank of America Corp. (BAC) CEO Brian Moynihan says America's fixation on Federal Reserve rate moves has overshadowed the private sector's role in powering the economy, even as mounting political pressure raises fears over the central bank's independence.

Moynihan Says Fed Focus Distracts From Private-Sector Strength

On Sunday, in an interview on CBS News' Face the Nation, Moynihan argued the U.S. economy is "much bigger" than the Federal Reserve and urged Americans not to treat small rate changes as decisive turning points. 

"There's too much fascination with the Fed," he said,

He added that the idea of the country "hanging on the thread by the Fed moving rates 25 basis points" shows how "we've gotten out of whack."

He said the central bank's role should be most visible only during crises, noting that the Fed acts as lender of last resort to stabilize markets and prices when shocks hit.

But outside those moments, he said, "you shouldn't know they exist, quite frankly."

Trump Pressure Raises Market Concerns Over Fed Independence

Moynihan also addressed rising concerns that the Fed could face political interference as President Donald Trump prepares to nominate a successor to Jerome Powell when his term expires in May.

Asked whether that risk could damage investor confidence, he replied, "The market will punish people if we don't have an independent Fed."

The interview was recorded Dec. 17, shortly after the central bank cut rates by a quarter point for the third straight meeting, while Trump continued pressing for deeper cuts and publicly criticizing Powell's approach.

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JP Morgan had previously expected a pause to rate cuts until January, but changed course following Fed remarks, while Goldman Sachs (GS) cited employment data as signaling a likely cut.

The revisions reflected comments from New York Fed President John Williams, who described policy as "modestly restrictive" with room for adjustment, noting inflation had stalled around 2.75% and the labor market had cooled to pre-pandemic levels.

Amid market volatility, veteran bond manager Bill Gross also anticipated another rate reduction, as rising inflation, tariffs, and slowing wage growth heightened economic pressures.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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