(Reuters) – Bank of America CEO Brian Moynihan cautioned on Sunday that U.S. consumers could become discouraged if the Federal Reserve doesn’t begin lowering interest rates soon.
In late July, the Federal Reserve maintained its policy rate within the 5.25%-5.50% range, where it has remained for over a year. However, the central bank indicated that a rate cut could occur as early as September if inflation continues to ease.
“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 said in an interview with CBS. “Once the American consumer really starts going very negative, then it’s hard to get them back.”
When asked about former President Donald Trump’s recent comment that presidents should influence Federal Reserve decisions, Moynihan responded that while individuals are free to offer advice to Fed Chair Jerome Powell, it’s ultimately Powell’s responsibility to make decisions.
“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,” Moynihan added.
