Bank of America CEO warns that the market's excessive focus on the Federal Reserve is "putting the cart before the horse."

Bank of America CEO Brian Moynihan warned on CBS News' "Face the Nation" that the market's focus on the Federal Reserve has become "obsessive." He emphasized that the U.S. economy is primarily driven by the private sector, not by the Fed's interest rate adjustments, stating, "The idea that our fate is tied to a 25 basis point adjustment by the Fed is, in my view, simply out of whack."

Moynihan acknowledged the Fed's critical role in extreme situations like financial crises and pandemics, but stated that during normal times, "people really shouldn't feel its presence." He also warned that if the Fed loses its independence, the market will punish it.

The background is Trump's ongoing calls for larger rate cuts and pressure on the Fed. Capital Economics predicts that due to core inflation remaining above the 2% target for an extended period, the Fed may only cut rates by 25 basis points in 2026, which would put Trump and his newly appointed Fed chair in almost immediate opposition.