In a recent interview, the CEO of Bank of America, Brian Moynihan, urged the Federal Reserve to consider lowering interest rates to avoid a possible economic recession.
Moynihan emphasized the trend in consumer spending, indicating a significant slowdown in growth.
“In our user base of 60 million customers who spend every week, what we're seeing is that they're spending at a growth rate this year compared to last year, for July and August so far, of around 3%. That's half of last year's rate at this time,” Moynihan reported.
He emphasized that although consumers still have money in their accounts, they are "slightly reducing" their spending, indicating that they may be using savings to maintain their lifestyle, especially during the summer months.
Regarding the Federal Reserve's approach, Moynihan cautioned against keeping interest rates high for too long.
"We have won the war against inflation, it has gone down. It has not reached the level that people want, but we have to be careful not to try to be so perfect that we actually lead us into a recession,” he said.
He called for more accommodative monetary policy, saying, "I think now, it's time for the Fed to start being a little more accommodative, and loosen the restrictions and let things cool down."
He added: "They've told people that rates probably won't go up, but if they don't start lowering them soon, you're probably going to disappoint the American consumer."
When asked about political influence on the Federal Reserve, especially in the context of former President Donald Trump's recent comments suggesting greater presidential control over the Fed, Moynihan defended the institution's independence.
