Bank of America CEO Brian Moynihan has issued a warning that the U.S. Federal Reserve needs to cut interest rates soon to avoid negatively impacting consumer sentiment.

He emphasized that maintaining high rates for an extended period without cuts could foster widespread negativity among American consumers, a situation that would be challenging to reverse.

Currently, the Fed has kept the policy rate between 5.25% and 5.50% since late July, although there are indications that a rate cut could occur in September if inflation continues to decline.

Moynihan also pointed out that economies with independent central banks typically perform better than those subjected to political pressures.

In light of comments from Republican candidate Donald Trump regarding presidential influence over Fed decisions, Moynihan clarified that while advice may be offered, the ultimate decision rests with Fed Chair Jerome Powell.