Picture courtesy of CBS News

 

Bank of America CEO Brian Moynihan has warned of market turmoil if the Federal Reserve's autonomy is compromised, as US President Trump searches for a new Fed chair. Moynihan, in an interview for "Face the Nation," emphasised the essential role of an independent Fed, stating, "The market will punish people if we don't have an independent Fed." This statement comes amidst President Trump's dissatisfaction with current Fed Chairman Jerome Powell, whose term ends in May 2026.

 

The Federal Reserve recently made headlines by cutting interest rates for the third consecutive time, bringing the federal funds rate to between 3.5% and 3.75%. Interest rates had been nearly zero during the COVID-19 pandemic but began climbing in 2022 to combat inflation. The latest cut means rates are now at their lowest since November 2022.

 

President Trump has often criticised Jerome Powell, despite the Fed's status as an independent agency. The Senate confirms the president's nomination for the Fed chair, safeguarding it from dismissal without cause. Congress can limit the grounds for firing independent federal board members, including those of the Fed, thanks to a 1935 Supreme Court ruling.

 

In a recent Supreme Court decision, Trump was authorised to remove members from federal labour boards, excluding the Federal Reserve. The court recognised the Fed as a "distinctly structured, quasiprivate entity" with historical significance.

 

Moynihan noted the president has excellent candidates in mind for Powell's successor but warned against an overreliance on the Fed's decisions. He stressed the private sector's role in driving the economy and suggested that the focus on the Fed’s rate adjustments is disproportionate. Moynihan asserted the Fed's role is significant for economic stability, yet ideally, their presence should be almost unnoticeable, reported CBS News.

 

 

Key Takeaways

• Brian Moynihan warns of market punishment without an independent Fed.
• Trump is unhappy with current Fed Chair Jerome Powell; his term ends in May 2026.
• Interest rates dropped to 3.5%–3.75%, the lowest since November 2022.
   

  Adapted by ASEAN Now from CBS News 2025-12-29

 

 

 

There is no independence. 

Listen to this guy! Somebody who makes $35M a year must know what he talking about! Just like Leon, right?