Bank of America Corp. chief executive Brian Moynihan Friday praised the Federal Reserve’s decision to launch a new effort to pump money into the nation’s ailing economy.
“They are trying to get the economy moving,” said Moynihan in a brief interview. “It’s the right decision because it’s working.”
The Fed pledged Thursday to buy $40 billion in mortgage-backed bonds every month from large banks and other dealers in an effort to help free up capital and spur lending. The move is also expected to help push down mortgage rates, already near record lows, to further stimulate the housing market. The central bank said it would continue buying until the unemployment rate, which stood at 8.1 percent in August, decreases significantly.
Wall Street continued to cheer the news. The Dow Jones Industrial Average, which surged more than 206 points after the Fed announcement Thursday—climbed another 53 points Friday to 13,593, its highest closing since December 2007. Global markets also reacted positively: the Hang Seng index in Hong Kong surged 2.9 percent, the Japanese Nikkei 225 index shot up 1.8 percent, and the British FTSE 100 rose more than 1.6 percent.
However, critics worry the Fed’s policies could eventually lead to increased inflation. The ultra-low interest rates have also vexed retirees and others savers trying to generate income from their bank deposits. And some Republicans have raised concerns that the Fed action may tip a tight presidential race in favor of President Obama—an issue Moynihan declined to comment on.
Charlotte, N.C.-based Bank of America is one of the country’s largest banks and the largest in Massachusetts, as measured both by customer deposits and branches. Moynihan, who lives in Wellesley, became chief executive of the bank in January 2010.Todd Wallack can be reached at email@example.com. Follow him on Twitter @twallack.