Bank of America chairman and CEO Brian Moynihan expressed optimism about the incoming Trump administration in a fireside chat at Yahoo Finance Invest on Tuesday.
“They’ve got the experience,” he said. “The thing that’s always interesting about a second term of an administration — this one had four years between it — is that they come in without having to go through all the work” of hiring officials and determining policy.
“All that is important when you do it the second time, especially when you have time to think about it,” he said. “They should hit the ground running.”
Asked by Yahoo Finance executive editor Brian Sozzi what advice he would give the Trump cabinet for its first 100 days, Moynihan said, “the first order business is to play to our strengths. We are the innovation capital of the world. We are the capitalist capital of the world. The U.S. has better laws and strong consumer consumption among its 300 million citizens.
“I think you have to remember that those things are what makes America great,” Moynihan said. “Enhancing those is what people have to do.”
Moynihan recommended better managing the government budget.
“It doesn’t mean there’s a crisis right now, but at the end of day we have to shape the budget back into a more normalized budget,” he said. “Interest rates are going to be higher, debt carry costs are going to be higher.”
The U.S.’s $2 trillion deficit is roughly equal to the entire gross domestic product of Australia, he said. But the government needs to be careful not to revise the U.S. tax system too radically, he warned.
“One of the advantages the U.S. has is a reasonable set of tax provisions for corporations,” Moynihan said. “That’s why the money comes here.”
The Trump team will also inherit a housing shortage and will need to create the conditions for more homes to be built, Moynihan said, adding that those conditions will necessarily include incentives for communities to permit more housing construction.
The Bank of America leader also praised Federal Reserve chair Jay Powell.
“I think he’s done a good job of working through the system,” he said. “Were they too late to get to inflation? Sure. They were in unprecedented times, they didn’t see it.” But now, inflation is coming down, unemployment has been relatively steady and employment has been very strong, he said.
Echoing many in his industry, Moynihan expressed frustration with
“We have made it clear that this doesn’t make any sense,” he said. For Bank of America, having to set aside more capital would hamper its ability to lend and make it harder for small and medium size businesses to get credit.
Asked what he would do if the incoming President called and asked him to serve in the administration, Moynihan diplomatically said he would say no.
“I’ve got a great job at a great company,” he said. “I think that people can work in administration, do a great job and our job is to make them successful. Our job is to add to America’s success and help give ideas to make it even more successful. So I can do that just as well sitting in this chair.”