WHEN: Today, Wednesday, March 19, 2025
WHERE: CNBC’s “Squawk Box”
Following are excerpts from the unofficial transcript of a CNBC interview with Bank of America CEO Brian Moynihan on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Wednesday, March 19. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2025/03/19/bank-of-america-ceo-brian-moynihan-the-economy-ought-to-be-holding-up-better-than-people-think.html
All references must be sourced to CNBC.
MOYNIHAN ON SPENDING LEVEL BEING UP
Our Bank of America consumers are putting 6 percent more money, you know, into the economy than they did for the first two and a half months of the last year. And so, that’s a pickup from the fourth quarter last year, which ran 4, 4.5 percent. So, that money is going in different places. And you’ve heard – you’ve referenced some clients that might be seeing different things, but a lot on services, a lot on entertainment. But the spending levels continue to go up.
MOYNIHAN ON NOT SEEING A RECESSION
This quarter, a trillion and a half dollars will go out of our consumers’ accounts in the economy, it’s going – 6 percent more will go out this quarter than last year, round numbers. So that means it’s solid. And I think that sets up what Candice Brown implied and her team see in the research is they don’t see a recession, but they continue to consider the tariff impact on GDP. And they’ll keep reflecting that. But they don’t see recession. They don’t – they see inflation being sticky. And the Fed’s going to hold rates.
MOYNIHAN ON GDP GROWTH
And so right now, they have 2.5 percent for the first two quarters of this year. My guess is as they – those tariffs become more real as we move to the April 2nd date, et cetera, they’ll bring that down a bit and probably closer to 2 for the year. And they have two 2 percent GDP growth for ‘26. That’s, you know, that’s trend growth. That’s what we’ve all been trying to get to. For 10 or 15 years after the financial crisis, we never saw that kind of GDP growth rate except in corrective periods. And we never saw inflation.
MOYNIHAN ON INFLATION AND THE FED
inflation is stickier, largely because tariffs add to inflation. They believe that. But they think it’s – and offset by deregulation and other things that businesses will like. And that will help profit margins be maintained and maybe not pass through everything to the customer, but once you get through the other period, it’ll adjust out. But they’re saying that adds to inflation. So that means the Fed’s probably on hold for the rest of their forecast period, which is the rest of this year into next year.
MOYNIHAN ON REGULATION
The goal is to get the regulation fixed and it’s clearly not true because we have 70 million customers and we bank all different types of – 100,000-plus religious organizations, et cetera, et cetera, et cetera. We bank oil and gas companies, and all this stuff that people say you don’t or do. The reality is that the regulations, because they have things like reputational risk, which is viewed after the fact in retrospect, are very difficult for institutions to comply. So our industry has made it clear with the Senate Banking Committee and the House Banking Committee and the administration, if you change these rules, you will not have this vice you put the industry in. And by the way, then it’s interpreted by different administrations differently.
MOYNIHAN ON TARIFFS
What they’re trying to figure out now, and it creates a lot of debate, is that the offset to that is understanding how these tariffs will affect the trading patterns of the world, the delivery patterns of the world, the manufacturing patterns of the world, and getting that right, because at the end of the day, you know, this country is a big final market, as is Europe, where lots of goods are sold. And as is, you know, Canada and Mexico are part of the supply chain and part of the final markets, and as is China. And everybody’s trying to figure that out.
MOYNIHAN ON TARIFF AND REGULATORY ASPECTS
And I think if you look at other industries, they’re trying to figure it out. But at the end of the day, the regulatory aspects got past a point where people could function, and now they’ve just got to figure out the tariff aspects, which are tricky depending on the industry and more impactful on some and they’ll see it play out. But I think all of us will get to the other side and figure it out. As long as it becomes clear relatively soon.
MOYNIHAN ON STICKINESS BEFORE INFLATION
I think people are premature how fast they’ll come out. And you’ve seen the market whipsaw on that. No cuts, seven cuts, four cuts, three cuts, no cuts, three cuts. You know, it’s banging around. But the reality is you’ve already seen rates come down. And the Fed will have to be careful to make sure they glide the path down. So the stickiness had to do more with you know, before inflation. Inflation adds another 10, 20, 30 basis points. Our team says too, the inflation rate which then makes it a little higher nominally but the reality is over time that works through because the base becomes higher.
MOYNIHAN ON INTEREST RATE
In the long term, it would be a better situation if the United States had a real interest, a nominal interest rate, and a real interest rate that started with a more normal front end, 3% say, on a Fed funds rate and a 4.5% ten year rate. That is more what we have had over time. We had a very odd period from the financial crisis, really interrupted a bit by the pandemic. But, you know, long term growth, we barely got rates up in 19 and they were cutting rates again because inflation and growth was not sufficient. So you know, I think the trick now is not to overcorrect.
MOYNIHAN ON NOT BEING PREMATURE
The tough part for the Fed is how do they bring this down but not bring it down so fast they put us back in the trough of low, low inflation, low growth. And I think the good news is with the consumer spending we see that’s consistent with a growing economy. And they’ve got a real interest rate across the curve now. In terms of that, they’ve taken a lot of monetary accommodation and shrunk their balance sheet. And so as the tariffs and other things, new policies go through they can react to that. But they shouldn’t be premature to try to you know goose the economy when it’s, you know, growing at 2%.
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