Brian Moynihan's Take on the Economy: Inflation, AI, and Policy Challenges (Aug 3, 2025)

Bank of America CEO Brian Moynihan says consumers are "more cautious" amid Trump policies (YouTube link)

Bank of America CEO Brian Moynihan, in the interview above, discussed the economic outlook and various factors impacting it:

• Economic Forecast: Bank of America's economists predict no rate hikes or recession in 2025, expecting slower economic growth (1.5% this year, slightly higher in subsequent years). Inflation is expected to persist until 2026-2027, with the Federal Reserve likely holding rates steady until mid-2026 before cutting to a "normal" 3-3.5% range.
• Federal Reserve and Interest Rates: Despite market expectations of rate cuts in September, Moynihan’s team believes the Fed will remain cautious until inflation is under control, targeting a 2% rate.
• Tariff Impact: Moynihan noted tariffs could add 30-40 basis points to inflation, though their full impact is uncertain due to the unique economic context. Businesses are cautious, awaiting clarity on trade, immigration, taxation, and deregulation policies from the new Trump administration.
• Business Caution: Companies are delaying hiring and investments due to uncertainty around policy changes, contributing to the weakest job growth in three months since the pandemic.
• AI and Job Market: Moynihan highlighted AI's transformative impact, noting Bank of America reduced its workforce from 285,000 in 2010 to 212,000 today due to technology. AI is reshaping jobs but not yet significantly impacting hiring, as companies are still learning to adopt it. Historically, technological advancements have increased employment over time.
• Jobs Data and Government Statistics: Moynihan expressed concern over the firing of the head statistician responsible for jobs data, suggesting outdated survey methods (with declining response rates) undermine data credibility. He advocated for modernizing data collection using existing government-reported data.
• Allegations of Bias: Responding to claims that Bank of America restricts conservative businesses, Moynihan denied systemic bias, emphasizing decisions are risk-based. The bank works with industries like guns, oil, and tobacco, but individual credit decisions may vary. Regulatory clarity would help avoid perceptions of unfair treatment.

Overall, Moynihan emphasized cautious optimism for economic growth, the need for policy clarity, and the transformative potential of AI, while addressing concerns about data reliability and regulatory challenges.