BofA CEO Warns Trump Pressure on Fed Risks Market Fallout
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The CEO of Bank of America (BofA), Brian Moynihan, said last week that the market “will punish people if we don’t have an independent Fed.”
The BofA Chairman and CEO issued this warning as President Trump searches for a new chair of the Federal Reserve, noting that maintaining the banking system’s independence is paramount, as CBS News reported.
Moynihan argued that any efforts by Trump to influence the Federal Reserve could have harmful effects on the stock market.
The Federal Reserve is the nation’s central bank, and it sets the interest rates. At the agency’s December meeting, it decided to cut interest rates for the third consecutive time. This reduced the federal funds rate, which is the rate at which banks charge each other for short-term loans, to between 3.5% and 3.75%.
CBS’ report goes on to say that interest rates had dropped to nearly zero during the COVID-19 pandemic, but they started to increase steadily in 2022 in order to curb inflation. However, the December rate cut has put the benchmark interest rates at their lowest since November 2022.
Furthermore, throughout 2025, Trump has repeatedly expressed his displeasure with the Fed chairman, Jerome Powell, whose term is set to expire in May 2026.
US President Does Not Have Permission To Fire Fed Chair
The report further said that the Fed chair is traditionally nominated by the president and confirmed by the Senate. Despite this, the Federal Reserve remains an independent agency, and there is no legal precedent for Trump to fire the chair for anything but “for cause.”
The Congress is allowed to limit the grounds on which the president can fire members of independent federal boards, according to the Supreme Court ruling from 1935.
With that said, the high court did allow President Trump to fire members of federal labor boards back in May. However, this exempted the Federal Reserve. The court described it as “a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.”
CBS News quoted Moynihan’s statement from “Face the Nation,” where he said that Trump has great candidates for when Powell retires in May, but he also warned that he felt there is too much fascination with the Fed right now.
“We’re a country that’s driven by the private sector, by what people do, and in the businesses and the companies, small companies and large companies, medium-sized companies, and entrepreneurs and doctors and lawyers — all these people drive our economy,” Moynihan said, arguing that the Fed’s decision to move rates does not mean that the fate of the financial industry hangs by a thread.
