Bank of America CEO Brian Moynihan expects no interest rate cuts this year

Core Insights - Bank of America CEO Brian Moynihan discussed the implications of President Trump's new auto import tariffs, which impose a 25% tariff on passenger vehicles, light trucks, and certain auto parts imported into the U.S. [1][2] Economic Impact - The new tariffs are expected to increase car prices and slow vehicle purchases, reflecting a broader market adjustment [2] - Moynihan indicated that the tariffs could contribute to a 0.25% increase in inflation and potentially slow growth in countries like Japan that export to the U.S. [3] - Bank of America projects positive U.S. growth of 2%, with an initial 1.5% in the first quarters, despite the tariff impacts [4] Consumer Behavior - Despite concerns about consumer spending, Bank of America has observed a 5% increase in customer spending compared to the previous year, indicating resilience in consumer behavior [6] - Spending on food, restaurants, and entertainment has increased, driven by higher prices [7] - The unemployment rate stands at 4.1%, with strong wage growth contributing to consumer confidence [8] Business Sentiment - Consumer sentiment dropped nearly 11% in February, yet spending remained stable, suggesting a disconnect between sentiment and actual spending behavior [9][10] - Small and medium-sized businesses are cautious, borrowing less than before the pandemic, indicating a wait-and-see approach regarding the economic impact of tariffs [11][12]