Market Analysis

Bank of America CEO Brian Moynihan warned on Sunday that if the U.S. Federal Reserve does not begin lowering interest rates soon, American consumers might become discouraged.

In late July, the Fed maintained its policy rate within the 5.25%-5.50% range, where it has remained for over a year, but indicated that a rate cut could be possible in September if inflation continues to decrease.

Moynihan expressed concern in a CBS interview that while the Fed has suggested it will not raise rates further, failing to reduce them promptly might lead to a decline in consumer confidence. He noted that once consumer sentiment turns negative, it can be challenging to reverse.

Regarding Republican candidate Donald Trump's comments about presidential influence over Fed decisions, Moynihan stated that while individuals are free to offer advice to Federal Reserve Chair Jerome Powell, it is Powell's responsibility to make the final decision. Moynihan emphasized that countries with independent central banks tend to perform better economically than those without such independence.

Paraphrasing text from "Reuters" all rights reserved by the original author.