Bank of America Corp. (BAC) CEO Brian Moynihan thinks we all need to calm down about the Federal Reserve. In his view, America's obsession with rate moves has completely overshadowed what actually drives the economy: the private sector.

Stop Hanging on Every Quarter Point

Speaking on CBS News' Face the Nation on Sunday, Moynihan didn't mince words. "There's too much fascination with the Fed," he said, arguing that the U.S. economy is "much bigger" than the central bank and urging people to stop treating small rate adjustments as make-or-break moments.

The notion that the country is "hanging on the thread by the Fed moving rates 25 basis points" shows how "we've gotten out of whack," he added.

According to Moynihan, the Fed's role should be most visible during crises, when it acts as lender of last resort to stabilize markets and prices when shocks hit. But beyond those moments? "You shouldn't know they exist, quite frankly."

Political Pressure and Fed Independence

Moynihan also waded into trickier territory, addressing mounting concerns about political interference as President Donald Trump prepares to nominate a successor to Jerome Powell when his term expires in May.

Asked whether that risk could shake investor confidence, Moynihan's answer was direct: "The market will punish people if we don't have an independent Fed."

The interview was recorded December 17, shortly after the central bank cut rates by a quarter point for the third consecutive meeting. At the time, Trump was publicly pressuring the Fed for deeper cuts and criticizing Powell's approach.

Wall Street Adjusts Its Expectations

The Fed chatter has kept Wall Street analysts busy revising their forecasts. JPMorgan (JPM) had previously expected a pause to rate cuts until January but changed course following Fed remarks, while Goldman Sachs (GS) cited employment data as signaling a likely cut.

The revisions reflected comments from New York Fed President John Williams, who described policy as "modestly restrictive" with room for adjustment, noting inflation had stalled around 2.75% and the labor market had cooled to pre-pandemic levels.

Amid market volatility, veteran bond manager Bill Gross also anticipated another rate reduction, as rising inflation, tariffs, and slowing wage growth heightened economic pressures.