Bank of America chief executive officer Brian Moynihan on Wednesday, February 12, said that the strong consumer spending in the United States in the current year means that the Federal Reserve System is likely to hold off on cutting its benchmark interest rate.
Retail clients of the mentioned financial institution, which is one of the largest in the US banking sector, spent a sum of money in the first 40 days of 2025, which is about 6% higher than the same indicator recorded for a similar period in 2024. The head of Bank of America said this during a conversation with media representatives. He also separately noted that the mentioned figure indicates an acceleration in the spending growth compared to the rates of this dynamic, recorded in the last three months of 2024. According to him, that is driving price firmness, demand firmness,
Brian Moynihan stated that there is currently activity that indicates that the United States economy is probably in a period where rates are going to stay. According to him, the relevant order of things will remain for some time until the situation settles in.
It is worth noting that on Wednesday, the United States Bureau of Labor Statistics reported a January increase in the consumer price index in the country. The pace of the upward dynamic of the mentioned indicator exceeded preliminary projections. Against this background, the markets have recalibrated their expectations regarding changes in the cost of borrowing in the United States in the current year.
It is worth mentioning that the Fed began the monetary policy easing cycle in September 2024. This was the first interest rates cutting since the 2020 coronavirus pandemic. At the same time, there is an active opinion circulating that the central bank of the United States has been limited in its ability to lower borrowing costs due to stubborn inflation, which has become something of a critical challenge for it in recent years.
Brian Moynihan said that the rates are restrictive. In his opinion, the United States has not made sufficient progress in countering inflation.
Bank of America research analysts do not expect that in the immediate future, the US financial regulator will decide to lower the cost of borrowing because of elevated inflation. This was told by Brian Moynihan.
