Against the backdrop of a robust U.S. economy and the potential resurgence of inflation, Brian Moynihan, CEO of Bank of America, recently urged Federal Reserve policymakers to carefully weigh the magnitude of rate cuts.

Moynihan stated in an interview with the media in Sydney on Wednesday that the Federal Reserve was "too late" in raising borrowing costs in 2022, and now they must ensure they do not overdo it when cutting rates.

Last week, Moynihan said that the bank expects the U.S. economy to "not land." The so-called economic non-landing refers to the economy maintaining growth while inflation remains stubborn. This will force the central bank to maintain a tough anti-inflation stance for a longer period.

The bank also said that despite some households recently showing stronger budget awareness, U.S. consumers can still get cash from savings accumulated during the pandemic. Investors are closely watching consumer behavior, which helps predict the Federal Reserve's rate cut path.

Last month, the Federal Reserve aggressively started the rate cut cycle with a 50 basis point cut. The interest rate path "dot plot" released after the meeting showed that there might be another 50 basis point cut before the end of the year, which means a 25 basis point cut each in November and December.

However, a series of data released since then shows that the U.S. economy is not as weak as Fed officials previously expected, triggering market speculation that the Federal Reserve may slow down the pace of rate cuts later, and may even pause rate cuts within the year.

The Federal Reserve will hold its next policy meeting on November 6-7, and recently several high-ranking Federal Reserve officials have spoken out in support of gradual and slow rate cuts.

According to the CME "FedWatch," the current probability of the Federal Reserve cutting rates by 25 basis points in November is 89.2%, the probability of maintaining the current rate is 10.8%, and the probability of cutting rates by 50 basis points is 0%.

Moynihan made the above remarks during his first visit to Australia. During this trip to Australia, he will also meet with King Charles of the United Kingdom, who is also in Australia discussing the Sustainable Markets Initiative, of which Moynihan is the chairman.

Moynihan, 65, is one of the longest-serving CEOs among top U.S. banks and has indicated his intention to continue in his position for the next few years. In 2010, as Wall Street emerged from the subprime crisis, Moynihan was promoted to CEO of Bank of America and led the bank through the COVID-19 pandemic and the banking crisis in 2023 that brought down Credit Suisse and Silicon Valley Bank.