Bank of America CEO Brian Moynihan is looking forward to December.
He’s not necessarily expecting an extravagant gift. But, if Federal Reserve Board of Governors Chairwoman Janet Yellen is making a list, what he wants is a rate hike.
In an interview with Bloomberg Television’s David Westin on Tuesday November 10, Moynihan was asked what a rate hike would do for his business.
“Well we disclosed, and we just – 10-Q within there that basically it’s $US4.5 billion round numbers [in revenue] for every 100 basis points increase in rates, parallel rate rise.”
“[W]hen you have half a trillion dollars in zero interest deposits that are always zero interest and have hit a floor, and when you have loans repriced or rates going up, it’s a good thing for a bank. And this has been a very tough environment.”
So we’ve established he wants the Federal Reserve to lift interest rates off from zero, where they have been for nearly seven years.
But Moynihan also had a pretty solid argument for why it should happen.
“It’s a strong economy,” he pointed out. “October is probably one of the strongest months this year relative to October of last year.”
Plus, there was last week’s eye-popping jobs report.
“The reality is what that really showed is the fundamental underlying strength of job formation, which is the critical thing,” Moynihan said.
We’ve got a little over a month to see if Bank of America and Moynihan get the rate hike they’re looking for.
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