‘We’ve gotten out of whack’ by fixating so much on Fed rates, but the loss of its independence will be punished, BofA CEO Brian Moynihan says

Bank of America CEO Brian Moynihan pointed out the U.S. economy is much bigger than the Federal Reserve, which shouldn’t merit so much attention.

In an interview with CBS News’ Face the Nation that aired Sunday, he was asked about President Donald Trump’s upcoming nomination of a new Fed chair to replace Jerome Powell and what it means for consumers.

“There’s too much fascination with the Fed,” Moynihan said.

The economy is driven by the private sector, which includes small, medium, and large companies as well as entrepreneurs, he added.

“The idea that we are, like, hanging on the thread by the Fed moving rates 25 basis points, it seems to me we’ve gotten out of whack,” he said.

The interview was recorded on Dec. 17, a week after the central bank lowered rates by a quarter point for a third consecutive meeting amid mounting signs of weakness in the labor market.

While the bank chief doesn’t think most Americans should fixate so much on the Fed’s rate moves, Wall Street has been counting on more easing to keep the stock market rally going.

Moynihan also acknowledged the Fed is the lender of last resort and plays a key role in stabilizing the economy, markets, and prices in times of extreme stress, such as during the financial crisis and the COVID-19 pandemic.

“But other than that, you shouldn’t know they exist, quite frankly,” he said.

However, when pressed about political interference worries at the Fed when a new chair takes over, he replied: “The market will punish people if we don’t have an independent Fed.”

That’s as Trump has continued to demand steeper rate cuts since he returned to the White House this year while applying extreme pressure on policymakers. He has relentlessly insulted Powell for not easing more, considered firing him, threatened to sue over cost overruns on the Fed’s headquarters renovation, and is still attempting to oust Fed Gov. Lisa Cook.

More recently, administration officials have suggested new conditions ought to be placed on the Fed’s regional presidents, raising fears of a purge. 

But earlier this month, the Fed reappointed those bank presidents a bit earlier than usual, surprising Wall Street and reducing concerns about threats to its independence.

That likely sets up Powell to step down from the Fed with more reassurance when his term as chair expires in May.

But Trump may still clash with his hand-picked replacement because the economy may prevent the central bank from lowering rates as much as he would like, according to Capital Economics.

The investment surge led by artificial intelligence is just the start of a multiyear boom in capital spending. As a result, GDP will grow at a robust rate of 2.5% in both 2026 and 2027, even after accounting for a weaker job market that will slow consumption, according to a recent note.

“With core inflation remaining above the 2% target for some considerable time, we think the Fed will cut its policy rate by only 25 [basis points] in 2026, putting the new Fed chair and President Trump at loggerheads almost immediately,” Capital Economics predicted.

This story was originally featured on Fortune.com