CNBC INTERVIEW WITH BRIAN MOYNIHAN, CEO, BANK OF AMERICA

TRANSCRIPTMarch 19, 2025NEWS PROGRAMBRIAN MOYNIHAN, CEO, BANK OF AMERICACNBC INTERVIEW WITH BRIAN MOYNIHAN, CEO, BANK OF AMERICAVIQ Media Transcription, Inc.20 East Thomas Road, Suite 2200Phoenix, AZ [email protected] 2025. Provided under license from VIQ Media Transcription, Inc.All materials herein are protected by United States copyright lawand/or license from VIQ Media Transcription, Inc., and may not bereproduced, distributed, transmitted, displayed, published orbroadcast without the prior written permission ofVIQ Media Transcription, Inc.You may not alter or remove any trademark, copyright or othernotice from copies of the content.CNBC INTERVIEW WITH BRIAN MOYNIHAN, CEO, BANK OF AMERICAMARCH 19, 2025SPEAKERS:BRIAN MOYNIHAN, CEO, BANK OF AMERICABECKY QUICK, CNBC HOSTJOE KERNEN, CNBC HOST BECKY QUICK, CNBC HOST: Bank of America is the nation's second largest bank. It serves one out of every two households in the United States, and that gives it pretty unique insight into the state of the consumer. Joining us right now in a CNBC exclusive interview is Brian Moynihan. He is the Bank of America's CEO. And, Brian, thank you for being with us this morning. BRIAN MOYNIHAN, CEO, BANK OF AMERICA: It's great to be here, Becky. Good to see you again. QUICK: All right. Let's talk a little bit about what you're seeing. We've been talking for a while about what's happening with the market. Part of the concern, maybe, is a changing policy coming out of the White House. But there have been real concerns about what's happening with the consumer — consumer confidence. Some of the retailers and the airlines talking about how they're seeing some weakness, at least for the month of February, they were with the consumer. We wanted to hear from you because you have such a good feel for the pulse of the consumer. What — what you see happening out there? MOYNIHAN: So, Becky, I hadn't go and pull the information just as — as the most recent date they could get. So they got it through Monday. And if you look year to date, the America — 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 last year. And so — and 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. And — but the spending levels continue to go up. And so we're in this classic moment, which we've been in various times, as you and I have talked over the last few years, where the consumer is saying, I'm getting more pessimistic in some of the surveys and things like that, but if you actually look what they're doing day to day, they continue to spend, which means the economy ought to be holding up better than people think. And so, we'll see this play out, but right now, the consumer is spending about at a faster rate now than they did in the fourth quarter, and a faster rate than they did last year. And that money is going out in the economy every day. And that — for a year, that amount of money going out of our accounts is $4.5 trillion. So it's not a small sample set and it's going into all different places. QUICK: Is your point then, that the ones we've heard it from, the retailers, the airlines — I mean, they're just spending it on different things? MOYNIHAN: Yeah, they're shifting to services, entertainment. Eating out has been relatively stable. They may not be buying as many airline tickets. That — you look at a debit and credit card data, you can see that. But at the end of the day, what I'm talking about is this quarter, a trillion and a half dollars will go out of our consumers' accounts and 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. So, we can talk about that. But that consumer-led economy that the U.S. is, that — that spending level and this is what is going on, not what people project will go on, and there's great debate about that because a lot of people say this could happen or should happen or might happen. This is what they're doing so far this year. QUICK: I guess the question becomes, is it a self-fulfilling prophecy once you start to see consumer weakness, just in terms of consumer sentiment? MOYNIHAN: Well, if you think about, you know, think of COVID and think of after COVID, and think of different policies and different things going on, the stopping of the stimulus payments, you've seen the consumer confidence up and down. And I think the consumer is rightfully saying, wait, this inflation — you know, these things may cause me to have to pay more. So let me think about that. Rates are up and it affects car — car loan pricing. It affects mortgage pricing. And that has an impact. But on the other hand, the consumers have tremendous wealth built up in their homes as — as you've been reporting. Your team's been reporting. It's the highest it's ever been and growing. And the stock market has corrected as you just referenced. But the reality is we are in September, and the consumer confidence in September was pretty strong. So this will sort out. And I think a lot of it has to do with the amount of changes going on with the new administration and trying to sort that out, both for the consumers and companies and small businesses. QUICK: Let's talk very quickly about the Fed, that meeting coming later today. You just said that inflation has been very sticky. I think the market's trying to suss out whether the Fed would step in if we did see a dip in the economy, or whether they'd be more likely to worry about inflation as we see it right now, not being completely back to their 2 percent target and any potential inflation that could come from tariffs. Where do you think the Fed is — is going to be putting more of its — of its focus? MOYNIHAN: Well, so let's go back to what our — the broad outlines. The Fed's going to reflect what they see in the stats and the data. They've been clear about that. If you look at what our team sees and what they project, they project the U.S. economy to slow down this year from — you know, high twos percent growth rate to closer to 2 percent. And the tariffs they think are about a 40 basis point hit to growth, especially in the first part of the year as people adjust to them. And so right now, they have 2-1/2 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 two 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. And on the other hand, inflation is stickier, largely because tariffs add to inflation. They believe that. But they think it's Hannibal 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 customer. But once you get through the other period, they'll — they'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. JOE KERNEN, CNBC HOST: Hey, Brian, I want to allay your fears. I'm going to talk about debanking, but not with you because I can prove you never debank me. I can prove that you didn't have something against my kind. MOYNIHAN: Thank you. KERNEN: I don't know — I don't know what my — you did close my most convenient branch. But I'm not going to — I won't talk to you about that. But, you know, it might be an issue. And, Tim Scott, the senator, does think it could be an issue. Now, President Trump is suing Capital One, saying that they closed a bunch of accounts down after January 6th without any reason for the Trump Organization. And it's been done in the past. It was actually — remember, Obama with Operation Choke Point and then Travis Hill, the FDIC chair, acting chair, released correspondence showing that Biden regulators sent letters not — don't lend a crypto. Actually, explicit letters do not lend to the crypto industry. So it's been done and abused. But I don't think it's the banks. I think it's regulators for whoever, you know, has a certain ax to grind at the time. Do you oppose having some type of — of legislation that would prevent regulators from doing these arbitrary and capricious things to banks and ordering them around? MOYNIHAN: Joe, you — you've laid out all the discussions and my discussions with Chair Scott and others. You know, there is a — an issue that we are being told we have to do X, and then people say, well, that's not right. And you're saying, but we are in the middle and it's an inch-wide, mile-deep hole. The penalties, the fines, the amount of work we have to do for these orders because they're based on things like reputational risk and, you know — and it's a zero fault tolerance viewpoint, which is you could do millions and millions of reviews, and if you — they — the regulators found one, they would exact severe penalties. So I think the goal is to get the regulation fixed and that — 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, 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. And on the crypto, I think Acting Chair Hill had it right. I mean, we were given letters that said, don't — this is an activity, we're not sure it's legal. Stay out of it. And we did. And if they make it legal, we'll get back in. As I said, we'll be back in the stablecoin business probably, and other things like that, and so the whole industry. QUICK: Brian, let's talk a little bit about animal spirits, because that was basically on every guest list starting in January, maybe even earlier than that, on the idea that the Trump administration and its pro-business policies would unleash these animal spirits. It does seem like that has slowed down a little bit. Maybe that is because of concern about what's happening with the tariffs and other places. But what do you see from all the business leaders you talked to? MOYNIHAN: Look, you know, the end of the day, the business community is very enthused about deregulation and getting regulation right, whether it's the drug industry, whether it's the bank industry, whether it's — you know, all different industries, they know that they have to have fair regulation, which is based in congressional intent and people's intent, but not subject to reinterpretation by other people. And that — that's been a difficult thing. We've been swinging back and forth for years on regulations. So they're enthused with the idea of lowering the regulation. I think that, you know, that would be good for America and also be competitive for America. And they were enthused about that. 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 — 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. That's causing people to say, wait a second, let me look at this. Now, the reality is that if you look at the underlying consumer activity, talked about it, if you look at commercial activity, their draw rates and lines of credit indicate that they're still — because a draw for small and medium sized business on a lot of credit is expensive (ph) — you know, has a high higher interest rate than it did before the rates came up. You know, they're looking at it saying, I got to really be sure that what I do happens. And you're seeing a little more draws now. That may be getting ahead of the tariffs. But the reality is, is the business is still a coiled spring ready to go when more certainty comes in. And I think all businesses try to plan, you know, one three, five years out. And if you're not sure how all this is going to work, that's going to take time. But the administration has been clear that they — they've got to get through a rearrangement of the — of the economy that thereafter. And they're trying to achieve. And I think as this plays out, you'll see businesses come back. You saw a big deal that you referenced earlier in the last couple of days. QUICK: Yeah, Google. MOYNIHAN: You'll see transactions take place, a lot of conversations. But that's just going to take a little bit of settling down for people to take off. KERNEN: So, Brian, net-net, you got what could be some deregulation in your industry. That could be very good obviously for you. You've got DOGE perhaps starting to make a dent in just, you know, the waste and fraud and overspending from — from a bloated organization. You've got tax rates most likely for corporations staying at 21 percent, and when that's extended, and then you got the tariffs. Will you — are you okay with — with both the good and the bad, net-net? Are you okay with — with that calculus of policies? MOYNIHAN: I think — I think we have a great company and we do have been through all different types of administrations, including the first one, George Washington's. And so we're, you know, we'll adjust and make the thing work. I think it just takes time to settle into a new set of patterns. And I think that — look, the deregulation thing is real for our industry. You know, we had a sort of behind the scenes constant ratcheting up of our capital requirements, our liquidity requirements of — and, you know, over the last couple of years, our common equity is up 25 percent and our risk really didn't change. And our capital ratios reported only went up like half of that. And so, you're saying that doesn't kind of make sense. So I think the new — the new efforts in the Fed and others, you know, are going to try to put that back in the middle. And I think that's all good. And if it's good for banking, it'll be good for our clients because we'll be able to lend more money. A hundred basis points of capital is a couple hundred billion dollars of lending we could do. And what seems like a little bit is actually a lot. And that's what we're trying to get through to people. 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 in 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. QUICK: Brian, we're running a headline right under you that says inflation — according to you, inflation is stickier, largely because of the tariffs. Is that a fair assessment of what you said, or was it slightly more nuanced than that? MOYNIHAN: No, it was — it's sticky before the tariffs. The tariffs did add a nominal amount to it. It's — they're not caught (ph) — it's the — the stickiness of inflation has been true. And that's why we, you know, four months ago — two months ago, took off any Fed cuts for '25 and '26 before everybody else did, Candice and her team, on a theory that this inflation was going to take longer to squeeze out. If you go ask the historians, you know, in effect, they say it takes three or four years. And so, 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 to 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, as you well know. QUICK: Yeah. I would think, though, that the Fed would be a little cautious about cutting, not knowing what the impact of tariffs is going to be. And Jay Powell has said that they can't make policy based on things that haven't happened yet. But it would seem that maybe they'd want to hold on to the firepower that they've built up over the last year or so. MOYNIHAN: Look, 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 percent, say, on a Fed funds rate, and a 4-1/2 percent 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 we — you know, I think the trick now is not to overcorrect. When you talk to central bankers around the world who lived through that long period of time, they're saying, wait a second. If we choke off inflation now and choke off growth, isn't that what we tried for 10 or 15 years to get to that we couldn't get to? So I think the tough rule for — 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 go, 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 percent. You know, that's it's kind of interesting. QUICK: Yeah. MOYNIHAN: People might predict one lower than two this quarter. But the reality is first quarter sometimes is lower. But if you think about it, people are predicting 2 percent growth. We — we're dying to get there for a long period of time and we couldn't get there. QUICK: You know, "The New York Post" had a story a few days ago, a bunch of anonymous sources that they cited in this, but they were basically saying that Jamie Dimon and David Solomon have made a lot of moves to move closer to the Trump administration, as opposed to you. I just wonder, have you had talks with the Trump administration, anyone in the administration about changing regulations that are here, or the bank's relationship with the Trump administration? MOYNIHAN: Yeah, we work with every administration. We've worked with this administration and made our, you know, both at the industry level and our company level, making our points about how we do. We always try to educate from our standpoint and our industry standpoint, what could be done to improve the economy of America and the strength of America. And we firmly believe as a company and as an industry that that deregulation occurs. And we're making those points, whether it's to the congressional delegations or to the treasury secretary or to the others, they're saying, you've got to make this — you know, you can — you have a chance to make this swing back and get in a place where America can continue to make progress and grow. QUICK: Yeah. MOYNIHAN: I mean, think about the length of the economic recovery. The recession was so short around the pandemic. It's been this long recovery. If we can keep this going, that's good for the United States. It's also good for the world, quite frankly. QUICK: Yeah. Brian, I want to thank you for your time today. I guess the big takeaway, though, is that you think the economy is doing better than the market may be worried about at this point, just based on the numbers that you see. MOYNIHAN: We see the consumer continuing to be solid, and that should bode well for the economy. And yet there's a lot of question out there. And — but I think that will sort through. But right now, we're not talking about what could have happened. We're talking about is happening as the consumer continues to spend — QUICK: Yeah. MOYNIHAN: — pretty strongly for the first — first part of this year. QUICK: Okay. Brian, thank you very much for your time today. It's great talking to you. END