Bank of America CEO Brian Moynihan said on Wednesday that strong consumer spending so far this year means that the Federal Reserve will probably stop when lowering his benchmark interest.
The bank's retail customers spend about 6% more money in the first 40 days of this year compared to the same period in 2024, Moynihan told Leslie Picker of CNBC. That percentage is an acceleration of expenditure growth in the last three months of last year, he noticed.
“That is the firmness of the price, ask firmness,” said Moynihan. “You see activity that says that we are probably in a period in which the rates remain … where they are for a while until this settles.”
The Bureau of Labor Statistics reported on Wednesday the warm than expected growth in the American consumer price index, so that markets again calibrate the speed. The Fed started a relaxation cycle in September and leaves the rates for the first time since the Pandemie of 2020, but the central bank is seen as limited in how much it can reduce by stubborn inflation.
“The rates are restrictive, but there was not enough kind of inflation progress that we booked,” to lower the rates, Moynihan said.
In the near future, research analysts from Bank of America do not expect tariff reductions due to increased inflation, he added.
