Fed independence is important to the U.S. ‘and we should preserve it’ – BofA, Goldman Sachs

Bank of America (NYSE:BAC) CEO Brian Moynihan emphasized the critical importance of Federal Reserve independence amid growing concerns about political interference in monetary policy.

In a recent interview with CNBC, Moynihan stated that “a stable Fed and independent Fed is key” to economic stability, particularly given the size of the U.S. economy and its global influence.

“The Fed was set up to be independent and have a dual mandate: unemployment and price stability,” Moynihan told CNBC. He stressed that the central bank’s role in managing the economy through interest rate adjustments requires stability and autonomy from political pressures to function effectively.

Moynihan highlighted that the stability of the U.S. financial system affects the entire world, especially considering America’s $30T debt held globally and its dependence on international trade flows. While acknowledging that appointing a new Fed chair is “the right of the president,” he cautioned that markets (SP500), (DJI), (COMP:IND) would view a premature change in leadership as concerning.

He also noted that despite the political process that will unfold, the fundamental principle of Federal Reserve independence remains crucial to the proper functioning of both the U.S. and global economies. He suggested that “cooler heads” would prevail in decisions regarding Fed leadership.

Goldman Sachs (NYSE:GS) Chairman and CEO David Solomon echoed similar sentiments earlier.

“I think central bank independence, not just here in the U.S., but around the world, has served us incredibly well,” he said.

Solomon drew a distinction between monetary policy, where he believes independence is essential, and regulatory supervision, which he views differently. “Fed independence is very important, and it’s something we should fight to preserve.”