BofA CEO Warns Trump Fed Pressure Risks Markets
Bank of America CEO Brian Moynihan warned that political pressure on the Federal Reserve could trigger a market correction, stating that investors will punish any perceived lack of independence at the central bank.
Trump’s Search for a New Fed Chair
Moynihan issued the warning as President Donald Trump seeks a replacement for current Fed Chair Jerome Powell, whose term expires in May 2026. The BofA chief argued that attempts by the White House to influence Fed policy could damage the stock market, a risk that corporate leaders are increasingly vocal about as the political season heats up.
The Federal Reserve sets the federal funds rate, which determines the cost of short-term loans between banks. At the December meeting, the central bank cut rates for the third consecutive time, bringing the benchmark down to between 3.5% and 3.75%. This marks the lowest point for rates since November 2022, a shift from the near-zero levels during the COVID-19 pandemic to the steady increases enacted in 2022 to combat inflation.
The Legal Limits of Presidential Power
While the president nominates the Fed chair and the Senate confirms the choice, the Federal Reserve is legally structured as an independent agency. There is no precedent for the president to remove a Fed chair for reasons other than “for cause,” a restriction reinforced by a 1935 Supreme Court ruling.
The high court established that Congress can limit the grounds for dismissal, and while it has allowed the president to remove members of other independent federal boards, it explicitly exempted the Fed. The court described the central bank as a “uniquely structured, quasi-private entity” that follows a historical tradition distinct from other federal bodies.
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“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 during an appearance on CBS’ “Face the Nation.” He emphasized that while the Fed’s rate decisions are significant, they do not mean the financial industry hangs by a thread.
Throughout 2025, President Trump has repeatedly expressed his displeasure with the Fed chairman, keeping the pressure on the central bank despite the legal constraints. Trump has stated he has “great candidates” in mind for the role once Powell retires in May. Moynihan countered this focus by arguing that there is “too much fascination with the Fed right now,” suggesting that excessive attention on monetary policy distracts from the broader economic engine.
The CBS report notes that the Fed chair is traditionally nominated by the president and confirmed by the Senate. Despite this political pathway, 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 exemption did not apply to 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.”
Moynihan argued that the Fed’s decision to move rates does not mean that the fate of the financial industry hangs by a thread, emphasizing the resilience of the private sector. He suggested that while the Fed’s decisions are significant, they should not overshadow the fundamental drivers of the American economy.
