NEW YORK, December 30, 2025, 04:32 ET
- Brian Moynihan said markets would react sharply to any move that undermines Federal Reserve independence as President Trump weighs a new chair.
- Moynihan said Bank of America expects trade tensions to ease next year, with tariffs settling around 15% on average for most countries.
- He said consumer spending remains solid, but flagged a pullback by households and geopolitical shocks as key risks.
Bank of America Chief Executive Brian Moynihan warned that financial markets would not tolerate political interference at the Federal Reserve as President Donald Trump looks for a successor to Chair Jerome Powell.
The remarks matter now because Trump has signaled he wants sweeping changes at the central bank as it continues to steer interest rates lower after an inflation fight. Powell’s term as chair is set to expire in May 2026, and Trump has repeatedly criticized him over rate policy.
Trade policy is also back in focus for investors and corporate borrowers after a year of tariff volatility. Tariffs are taxes on imported goods, and sudden changes can hit business costs and household budgets, feeding into loan demand and credit quality at big banks.
“The market will punish people if we don’t have an independent Fed,” Moynihan said in a CBS News interview aired on Face the Nation with Margaret Brennan. https://www.cbsnews.com/news/bank-of-ameri…
The Fed sets the federal funds rate, the benchmark overnight rate at which banks lend to each other, which influences borrowing costs across the economy. CBS reported the Fed cut the target range for that rate for a third straight meeting in December to 3.5% to 3.75%.
Moynihan said public attention has drifted too far toward small shifts in rates, pointing to moves of 25 basis points, or 0.25 percentage point. He described the Fed’s core job as stabilizing markets as a lender of last resort, rather than driving day-to-day economic activity.
While the president nominates the Fed chair and the Senate confirms the pick, the central bank operates as an independent agency. CBS noted there is no legal precedent for removing a chair absent misconduct, and the Supreme Court has described the Fed as a uniquely structured entity that Congress shielded from routine political firings.
On trade, Moynihan said Bank of America expects the Trump administration to move toward a more stable tariff regime next year after the 2025 rollout jolted companies. He said the bank’s base case is an average tariff rate around 15%, with higher duties for countries that do not commit to buying U.S. goods or lowering non-tariff barriers such as quotas and local-content rules, Bloomberg reported.
He drew a sharper line on China, citing national security issues tied to supply chains for rare-earth minerals, batteries and artificial intelligence. He also said negotiations around the U.S.-Mexico-Canada Agreement, known as USMCA, would be a separate track.
Moynihan said the tariff shock earlier this year hit smaller firms hard when combined with higher interest rates. He said small businesses often rely on revolving credit lines with floating rates, and are now pressing for clarity on immigration rules because labor availability has become a top concern.
Bank of America’s own transaction data show consumers are still spending, Moynihan said, pointing to spending growth of about 4% to 4.5% versus a year earlier through November and early December. He said wage growth has been running at about a 3% pace and unemployment was 4.6% in the latest reading.
The bank projects the U.S. economy will grow about 2.4% next year, Moynihan said, but he framed that outlook as dependent on households staying engaged. For large lenders such as Bank of America, JPMorgan Chase and Citigroup, a sudden pullback by consumers or a geopolitical shock can quickly show up in credit performance and slower deal activity.
Moynihan also pointed to Bank of America’s growing use of automation, saying its mobile assistant Erica handles about 2 million customer interactions a day for roughly 20 million active users. The full interview is also posted here:
