• Bank of America (BAC) CEO Brian Moynihan forecasts multiple Federal Reserve rate cuts in 2026, viewing this as constructive for economic growth and credit conditions.
  • The bank reported strong Q4 2025 results, with net interest income up 10% year-over-year, and guides for 5% to 7% growth in 2026.
  • Moynihan opposes a proposed 10% cap on credit card interest rates, warning it could restrict credit availability for vulnerable borrowers.

Interest Rate Outlook and Economic Implications

Bank of America CEO Brian Moynihan said at the World Economic Forum in Davos that interest rates are going to continue to come down in 2026, a development he described as very constructive for the economy. Speaking to attendees, Moynihan projected that the Federal Reserve will cut rates multiple times later in the year, supported by easing inflation and stable employment figures. This outlook aligns with his revised forecast of 2.8% U.S. GDP growth for 2026, up from earlier estimates of 1.5%, after accounting for tariff impacts and policy uncertainty.

Efforts to navigate the shifting monetary landscape have been bolstered by Bank of America's recent performance. The company reported net interest income of $15.9 billion in Q4 2025, a 10% increase year-over-year, with loans growing 8% and deposits up 3%. According to people familiar with the matter, the bank has guided for 2026 net interest income growth of 5% to 7%, with approximately 200 basis points of operating leverage. Moynihan emphasized that lower rates are expected to particularly benefit small and medium-sized businesses with floating-rate credit lines, as reduced interest rate carry improves their financial conditions.

Political and Market Context

Amid these projections, Moynihan and other bank CEOs have strongly opposed a proposed 10% cap on credit card interest rates, set to take effect on January 20, 2026. In discussions with policymakers, Moynihan warned that such caps would make the economics of credit card lending unviable, given typical charge-off rates of 3% to 3.5%. He argued this could restrict credit availability, especially for vulnerable borrowers with lower credit scores, potentially forcing some out of the market altogether.

Looking ahead, the decline in interest rates is anticipated to support continued consumer spending and business investment, particularly in artificial intelligence infrastructure. Moynihan noted that strong corporate cash flows and open capital markets are sustaining large-scale spending on data centers and AI systems, which he identifies as major growth drivers for 2026. Globally, Bank of America projects world growth of approximately 3.6%, with emerging markets like India expected to grow 6.5%. Analysts are closely watching how these dynamics play out, as the Fed's moves could influence everything from mortgage rates to corporate borrowing costs in the coming months.