If the Fed does not start cutting interest rates soon, it could demoralize American consumers... Illustration photo. (Source: Bloomberg)

"If the Fed doesn't cut rates soon, they could demoralize the American consumer," Moynihan said in an interview with CBS . "Once consumers really get negative, it's very difficult to get them back."

When asked about the Fed's policy decisions, Mr. Moynihan said, people can give advice and then it is the agency's job to decide what to do.

“If you look at economies around the world and see where central banks are independent and operate freely, they tend to do better than those that don’t,” he said.

Earlier, on August 10, speaking before the Kansas Bankers Association in Colorado Springs, Fed Governor Michelle Bowman said that although the rate of inflation has slowed significantly in recent months, it is still higher than the Fed's 2% target.

Ms. Bowman assessed that the risk of rising inflation remained and the continued strength of the labor market appeared to be showing signs of “flaring.”

According to economic experts, this signals that the Fed Governor is not ready to support a reversal of tightening monetary policy, when US monetary policy makers prepare to meet in September and decide whether to start cutting interest rates.

At its policy meeting in late July, the Fed kept interest rates unchanged at 5.25%-5.50%, where they have been for more than a year, but signaled the possibility that the bank could cut rates as early as September 2024, if inflation continues to cool.