Bank of America CEO Brian Moynihan expects no interest rate cuts this year

Bank of America CEO Brian Moynihan weighed in on President Donald Trump’s brand-new vehicle import levies, how customers are responding to the administration’s tariffs and the bank’s expectations about rate of interest.

The brand-new step revealed Wednesday by the president will put a 25% tariff on traveler automobiles, light trucks and some vehicle parts imported into the U.S.

” I believe the principle wasn’t a surprise. It remained in the project, it’s been discussed, however the truth is now coming, therefore individuals are beginning to make modifications and attempting to find out what all of it methods,” Moynihan stated Thursday on “The Claman Countdown.”

PRESIDENT TRUMP REVEALS NEW AUTOMOBILE TARIFFS

Bank of America experts believe the brand-new tariff will trigger automobile rates to increase and purchase of automobiles to decrease, he informed host Liz Claman, keeping in mind “that’s what you’re seeing shown in the market.”

” When they think of it more broadly, it might include a quarter percent inflation. It might decrease some development in locations like Japan due to the fact that they export more to the United States, however in general, these things are soaked up in time,” Moynihan stated. “However up until they’re found out, no one truly understands that, and these are extraordinary waters in regards to quantities and various pieces and things like that.”

The vehicle tariff is slated to come into force early next week, marking the most recent levy on other nations’ imports from Trump considering that taking workplace in January.

” If we step way back and speak about our group, provided all the tariff discussion and attempting to factor it in, our Bank of America research study group … they have development in the U.S., favorable development 2%, one-and-a-half in the very first number of quarters and relocating to 2%, which is a relatively useful view,” Moynihan informed Claman.

He likewise stated Bank of America does not see the Federal Reserve cutting rates this year “due to the fact that they believe inflation has actually been sticky, will continue to be sticky.”

FEDERAL RESERVE LEAVES SECRET RATES OF INTEREST UNCHANGED AMIDST UNPREDICTABILITY OVER ECONOMY, INFLATION

Inflation determined by the customer cost index revealed a 0.2% boost month-over-month and a 2.8% dive year-over-year in February.

Bank of America is still seeing its consumers invest cash since Tuesday, according to Moynihan.

” The cash vacating their accounts– not just on their credit and debit cards, which is a little over 5%, however in overall– is 5% over where it was March of ’24 to March of ’25 and after that in the very first quarter, it’s a like quantity, which is a little faster paced than it remained in the 4th quarter,” he reported.

” So all you become aware of customers are stopping costs, we’re not seeing it yet,” Moynihan stated, keeping in mind that “bodes well” for America’s economy and will “clean” in the future.

According to Bank of America charge card information, investing in food has actually increased some due to greater rates, he stated. Dining establishment and home entertainment costs was likewise favorable.

” The credit quality benefits customers, prime customers particularly,” Moynihan stated. “They have their mortgage secured at an extremely low rate, in spite of the greater rates and the troubles that trigger in the real estate market. Vehicles are currently under pressure a bit due to the fact that vehicle rates are greater, so this will simply contribute to that, and we’ll see that clean.”

It “truly boils down to” work for the customer, he stated, keeping in mind the U.S.’ existing joblessness rate and calling wage development “still fairly strong.”

The Bureau of Labor Data pegged the joblessness rate at 4.1% in February.

” That keeps them in great shape, which will bode well as we overcome this duration of unpredictability as companies and others clean what all this indicates and how they adapt to it,” he stated.

Customer belief published an almost 11% drop in February, according to the University of Michigan Study of Customers.

” The American customer is intriguing due to the fact that they’ll state things and they’ll do things,” Moynihan informed Claman. “And despite the fact that the self-confidence was boiling down last month, they still invested this month. At the end of the day, as long as they’re utilized and we’re paying them more and turnover rates at business are down and the task market’s not as tight as it was, you understand, 2 years ago or a year ago … it’s a strong setting.”

He stated the tariffs and the “concerns around tariffs and the unpredictability” are more in the little- and medium-sized companies and big companies.

” However if you take a look at our little, medium-sized consumers, the intriguing thing is before the pandemic, they would obtain at a rate of about 40% of the line of credit round numbers, implying they would utilize the line usually 40%. Now, they have to do with 3 or 4% behind that,” Moynihan stated.

He recommended that they are attempting to ensure “they truly having something to invest in” which tariffs “simply include another concern.”

Such consumers are “going to be a bit on the sidelines” up until more clarify appears, Moynihan stated.