According to ChainCatcher, Bank of America CEO Brian Moynihan warned on CBS's "Face the Nation" program that the market's focus on the Federal Reserve has "gone mad." He emphasized that the U.S. economy is primarily driven by the private sector, not by the Fed's interest rate adjustments, stating, "The idea that our fate hangs on the Fed's 25-basis-point rate adjustments seems to me completely absurd."
Moynihan acknowledged the Federal Reserve's crucial role in extreme situations such as the financial crisis and the pandemic, but stated that in normal times "people shouldn't really feel its presence." He also warned that if the Fed loses its independence, the market will punish it.
The backdrop is Trump's continued demands for larger interest rate cuts and his pressure on the Federal Reserve. Capital Economics predicts that, as core inflation will remain above the 2% target for an extended period, the Fed may only cut rates by 25 basis points in 2026, which would almost immediately put Trump in opposition to his handpicked new Fed chairman.
