The Fed shouldn’t move too fast in cutting rates, Bank of America CEO says
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Contributor since / Followers
Contributor since / Followers
2 months ago
Win McNamee
- Now that the Federal Reserve has made significant progress in bringing inflation down toward its 2% goal, it shouldn’t move too fast in cutting rates, Bank of America (NYSE:BAC) CEO Brian Moynihan said on Wednesday.
- “They were late to the game,” when the Fed started raising rates in 2022, which the central bankers admit, he said in an interview on Bloomberg TV. “They had to move fast because inflation got ahead of them.”
- “They got to make sure they don’t go too hard now,” he added. “And that’s what they’re all trying to figure out watching the data.”
- More important, though, is the terminal rate, or the level at which the Fed stops its easing cycle. Bank of America (BAC) figures that the level will be ~3%. And that means banks and others would have to deal with a higher rate environment than before the pandemic.
- “That’s a whole different interest rate environment in the U.S. and other markets than has been in the last 15 years or so. We haven’t come close to that level front-end rate in a long time,” he said.