Bank Of America CEO Reportedly Says Fed Unlikely To Cut Rates This Year: ‘Our Research Team Has Taken All Rate Cuts Off The Table’

Bank of America CEO Brian Moynihan has reportedly said the Federal Reserve is unlikely to cut rates this year as consumer spending remains strong.

“Our research team has taken all rate cuts off the table because they thought that the dynamics of the potential inflationary effect would cause the Fed to hold back,” he told CNBC.

Moynihan explained that for the first 40 days of the year, the bank’s customers are spending about 6% more money compared to the same period last year. “That’s driving price firmness, demand firmness,” Moynihan said. “You’re seeing activity that says that we’re probably in a period where rates are going to stay … where they are for a while until this settles in.”

Consumer price index (CPI) rose 0.5% on a seasonally adjusted basis in January, while the annual inflation rate rose 3%, according to the Bureau of Labor Statistics.

This compares with a Dow Jones estimate of 0.3% and 2.9%, respectively, according to a CNBC report. Core CPI, which excludes food and energy prices, rose 0.4% in January and increased 3.3% annually, versus estimates for 0.3% and 3.1%.

“Rates are restrictive, but there was not enough sort of inflation progress that we made,” Moynihan said, according to the report.

With inflation coming in higher than expected, the Federal Reserve has solid reasons not to worry about rate cuts in the near term, dampening market optimism. Traders had anticipated a 25 basis point cut in July 2025, but those expectations have now shifted to October 2025.

The SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust, Series 1 (QQQ) fell nearly 1% in Wednesday’s pre-market but pared some losses.

Treasury yields rose, with the 10-year yield rising 10 basis points to 4.643%, while the two-year yield rose nine basis points to 4.386%, according to CNBC. The iShares 7-10 Year Treasury Bond ETF (IEF) traded 0.75% lower on Wednesday noon.

On Stocktwits, retail sentiment trended in the ‘bearish’ to ‘extremely bearish’ territories for these ETFs.

SPY’s Sentiment Meter and Message Volume as of 11:54 a.m. ET on Feb. 12, 2025 | Source: Stocktwits QQQ’s Sentiment Meter and Message Volume as of 11:54 a.m. ET on Feb. 12, 2025 | Source: Stocktwits

Notably, on Wednesday, Federal Reserve Chair Jerome Powell stated before the Senate Banking Committee that the central bank does not need to be in a hurry to cut interest rates and noted that while inflation has come down significantly, it is still above the 2% target.

“With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance. We know that reducing policy restraint too fast or too much could hinder progress on inflation,” Powell said in his prepared remarks.

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