Bank of America CEO on current consumer climate
WASHINGTON (CBS, KYMA/KECY) - Bank of America CEO Brian Moynihan spoke with Face the Nation moderator Margaret Brennan Sunday about the current consumer climate.
"In our consumer base of 60 million customers spending every week, what you're seeing is they're spending at a rate of growth of this year over last year, for July and August so far, about 3%. That is half the rate it was last year at this time. And so the consumer has slowed down. They have money in their accounts, but they're depleting a little bit. They're employed, they're earning money, but if you look at...they've really slowed down.
So the Fed is in a position they have to be careful that they don't slow down too much. Right now, where they are spending at is consistent where they spent in '17, '18,'19, a lower inflation, a more normal growth economy."
Brian Moynihan, Bank of America CEO
During the interview, Brennan and Moynihan talked about Trump's recent remarks that he would like a say in setting interest rates if he wins the presidential election.
"I think if you look around the world's economies and you see where Fed central banks are independent and operate freely, they tend to fare better than the ones that don't. And so I think that that's kind of the American way. It's been that way. Does that stop people from giving Chair Powell advice, or other people? No, I give him advice. So we all give him advice. And so I think he ought to be careful, you know, when he goes up and does the Humphrey Hawkins, he gets lots of advice about where rates should go. So there's a lot of people that have a view of it, but their job is to sort through it all and say what's best for the US economy on those two dimensions you talked about and be consistent.
I think right now, Brian Moynihan, giving advice, is they got to be more careful than the downside of not starting to move down rates to restore a feeling that, you know, there's light at the end of the tunnel. They've told people rates probably aren't going to go up, but if they don't start taking them down relatively soon, you could dispirit the American consumer. Once the American consumer really starts going very negative, then it's hard to get them back. And on the commercial side, the higher rate environment is slowing down commercial progress, so corporations aren't using their lines of credit. Middle markets, small businesses, they've gone backwards in the use of lines of credit. So why don't they use a line of credit? Either there is an opportunity or the cost is high, or both. And right now, that's a little bit they're worried about the future.
So I think right now, it's time for them to start to take the...become a little more accommodative, and take off the restrictions and let the thing put cool. I'm giving them advice. Everybody does, and I think the strong central bank has to take all that advice and process it."
Brian Moynihan, Bank of America CEO
To watch more of Brennan's interview with Moynihan, click here.
