It’s no secret that tariffs, trade wars, and talk of recession have dominated the economic conversation over the past year.
Heading into 2026, however, The CEO of Bank of America don’t panic.
In an interview on CBS News’ “Face the Nation with Margaret Brennan,” Brian Moynihan made a much quieter, counterintuitive argument that tariff-induced shock the gobbling up of markets last year is coming to an end.
For perspective, from December 26, 2025THE Nasdaq Composite up 22.2% year to date, the S&P 500 is increasing by 17.9%, and the Dow is up 14.5%.
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Contrary to what is coming across, Moynihan believes the rate situation is starting to settle.
He feels that once the dust settles where the ducks end up landing, companies will quickly adapt.
Costs will be assessed and supply chains will adjust.
Moreover, Moynihan also points to steady consumer spending, continued wage expansion and a slack labor market that is far from broken.
Even the Federal Reserve, he suggests, matters far less than Mr. Market thinks, so long as its independence remains intact.
Bank of America CEO Brian Moynihan says economy may be stronger than recent market fears suggest. Photo by Xinhua News Agency via Getty Images” loading=”eager” height=”641″ width=”960″ class=”yf-lglytj loader”/>
Bank of America CEO Brian Moynihan says the economy may be stronger than recent market fears suggest.Photo by Xinhua News Agency via Getty Images
Moynihan argues that the escalation period is over and the market is facing something much more digestible.
In his view, the tariff levels are actually bundled at the moment.
To better understand why they frame it this way, it’s imperative to look at how 2025 played out.
January 1, 2025: A 50% US tariff on Chinese chips came into effect, adding to the pressure from the beginning of the year.
April 2-5 (“Liberation Day” Shock): The US announced a Minimum rate 10%. for most imports, CNN reported, along with higher “reciprocal” rates 59 countries.
April-May (spade in China and then armistice): Some US-China tariffs have increased 125% amazingthen a May 12 offer cut hikes from april to 10% for 90 days (later extended).
End of July: A 15% to 20% “world rate” was floated, according to The Star, with the US-EU landing at 15%compared to the previously estimated 30%.
August 1–7: Rates extended to 10% to 41% at 69 partnersReuters reported, taking almost the actual US tariff rate 18%up from 2.3% the previous year.
Moynihan still feels China and North America (USMCA) there are exceptions, but outside of these bands, the rate story is largely stabilizing.
The crippling impact of the 2025 tariff shock can be gauged from a few hard numbers. The initial blow was quick and unsettling, to say the least.
That said, here’s what the data says:
Impact of inflation: Earlier in the year, Yale’s Budget Lab estimated that the 2025 tariffs would raise the U.S. price level by 2.3% in the short term, equal to almost $3,800 per household ($2024).
Resetting the tariff level: By the end of 2025, the effective US tariff has increased to approx 16 to 17%compared to the low single digits before the shock took effect.
Trade flows have changed: Rates generated north of 236 billion dollars in sales by November 2025, ca imports from China fell by 25% in the first three quarters.
Market reaction: After the announcement on April 2nd, the S&P 500 almost fell 15% at the gutter, sweeping around 5 trillion dollars in market value in just a few days, according to Reuters.
Moynihan it is clear that the real economic wild card lies elsewhere, with the big uncertainty for business now being labour, not trade policy.
He notes that for small and medium-sized businesses, the real challenge is figuring out whether they can hire and retain workers.
Labor availability, which is often tied to the clarity of immigration policy, continues to become harder to plan.
Although tariffs typically raise costs at the margin, labor uncertainty directly influences long-term growth and expansion decisions.
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At the same time, consumer behavior simply did not break.
Moynihan said consumer spending through late November and early December had grown healthily 4% to 4.5% year over year.
In addition, the data read at the beginning of the season shows a strong increase, with Visa vacation estimate retail spending up 4.2% (period November 1 – December 21).
More importantly, growth is still visible all income categorieswhich happens even if the sense of accessibility remains weak.
Additionally, labor force data helps explain why.
Wage growth is close to 3%while The US unemployment rate was 4.6% in November 2025or about 7.8 million peopleaccording to the Bureau of Labor Statistics.
Job growth is cool but intact, with 64,000 jobs added in November after a decline in October linked to the impact of the shutdown.
Yet at the same time, it seems that people are taking longer to find work. Forbes indicated that continuous jobless claims rose to nearly 1.92 million (week ending December 13).
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This story was originally published by TheStreet on December 29, 2025, where it first appeared in the Economy section. Add TheStreet as a favorite source by clicking here.
