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CNBC Transcript: Bank of America CEO Brian Moynihan Speaks with CNBC's Becky Quick Live on CNBC's "Squawk on the Street" Today

WHEN: Today, Tuesday, January 20th

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a CNBC interview with Bank of America CEO Brian Moynihan on CNBC's "Squawk on the Street" today. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000347913, http://video.cnbc.com/gallery/?video=3000347015 and http://video.cnbc.com/gallery/?video=3000347934.

All references must be sourced to CNBC.

SIMON HOBBS: IT IS THAT TIME OF YEAR AGAIN. THE WORLD ECONOMIC FORUM IS KICKING OFF IN DAVOS, SWITZERLAND. OUR OWN BECKY QUICK IS IN POSITION AT THE SKI RESORT AND JOINS US NOW WITH A VERY SPECIAL GUEST. BECKY, OVER TO YOU.

BECKY QUICK: THANK YOU, SIMON. THANK YOU VERY MUCH. RIGHT NOW WE ARE JOINED BY BANK OF AMERICA CEO BRIAN MOYNIHAN. AND BRIAN, IT'S GREAT TO SEE YOU HERE. I KNOW YOU GUYS HAVE JUST ARRIVED. AND WE REALLY APPRECIATE YOU MAKING THE TIME TO COME OVER.

BRIAN MOYNIHAN: WELL, IT IS A PLEASURE TO BE HERE. AND YOU LOOK AROUND BECKY, IT IS A SPECTACULAR SPOT ON A SUNNY DAY LIKE TODAY.

QUICK: IT IS. WE ARE LUCKY TO BE HERE. BRIAN, WHEN YOU LOOK AROUND THE GLOBE THOUGH, THERE ARE SOME REALLY CHAOTIC THINGS THAT ARE HAPPENING RIGHT ABOUT NOW. SOME MARKETS THAT HAVE BEEN IN FLUX, THINGS THAT WE HAVEN'T BEEN ANTICIPATING. AND I JUST WONDER WHAT YOUR PERSPECTIVE IS, FROM WHERE YOU SIT ON SO MANY OF THESE THINGS. YOU'VE GOT CURRENCY MARKETS IN FLUX, INTEREST RATES, OIL MARKETS. WHICH OF THEM SURPRISED YOU THE MOST?

MOYNIHAN: WELL, IT'S BEEN AN INTERESTING, LATE WINTER INTO HERE IN THE SENSE THAT YOU HAD OIL STRUCK MOVING, YOU HAD THE RATE STRUCTURE MOVE DRAMATICALLY. BUT IF YOU STEP BACK AND LOOK AT IT, IT'S ALL MOVING AROUND BASED ON THE ECONOMICS. AND AS WE LOOK AT WORLD, WE SEE THE WORLD GROWING NEXT YEAR, NOT AS FAST AS PEOPLE WOULD LIKE IT. WE SEE THE UNITED STATES PICKING UP GROWTH AND EVERYTHING WE SEE SUPPORTS THAT. SO I THINK AT THE END OF THE DAY, THOSE MARKETS ARE GOING TO REFLECT PEOPLE'S VIEW OF THE ECONOMICS, AS PEOPLE'S VIEW OF WORLDWIDE GROWTH SLOWS DOWN, EVERYBODY STARTED PULLING BACK. AND THEN YOU HAD SOME EXAMPLES OF REALLY UNUSUAL THINGS OF WHAT HAPPENED HERE IN THIS COUNTRY A FEW DAYS AGO. AND THAT MOVED THE MARKETS AROUND AND NOW THEY ARE SETTLING BACK INTO THE NEW REALITY.

QUICK: LET'S TALK ABOUT WHAT HAPPENED HERE JUST A FEW DAYS AGO. THE SWISS NATIONAL BANK, ACTUALLY DECIDING THAT IT WAS GOING TO DEPEG FROM THE EURO, CAUGHT A LOT OF PEOPLE FLATFOOTED. I DON'T THINK ANYBODY KNEW ABOUT IT. YOU DIDN'T KNOW ABOUT IT IN ADVANCE?

MOYNIHAN: NO, NOBODY KNEW ABOUT IT, BUT WHEN YOU ARE MANAGING A COMPANY LIKE OURS, OUR JOB IS TO – THERE ARE A LOT OF THINGS WE WON'T KNOW ABOUT, BUT HOW DO YOU KEEP THE RISK DOWN AND WE MADE MONEY THE LAST FEW DAYS. AND WE HAVE HELPED OUR CUSTOMERS, BUT IT HASN'T HAD A BIG IMPACT ON US. BUT IT CAUGHT EVERYBODY BY SURPRISE.

QUICK: HOW DID YOU FIND OUT ABOUT IT?

MOYNIHAN: I READ ABOUT IT OVER THE WIRE JUST LIKE YOU DID. AND IT WAS – YOU KNOW, IT REFLECTS A DECISION BY THIS COUNTRY TO MOVE FORWARD AND I THINK THAT'S GOOD BECAUSE THE WORLD'S GOT TO KEEP MOVING FORWARD OFF OF ARTIFICIAL ELEMENTS TO HELP PUSH GROWTH. ARTIFICIAL ELEMENTS AND GET BACK TO CORE GROWTH RATE. AND SO THERE'S A GOOD SIDE TO IT, IT'S JUST A DISLOCATION AS IT GOES THROUGH THE SYSTEM.

QUICK: YOU KNOW, THERE ARE A LOT OF PEOPLE WHO THINK THAT THEY HAD TO MOVE AHEAD OF WHAT IS EXPECTED TO BE SOME MOVE BY THE ECB THIS WEEK. THAT THEY WILL GO AHEAD AND START THEIR OWN QUANTITATIVE EASING. YOU THINK THAT'S THE CASE?

MOYNIHAN: ALL OF OUR EXPERTS SAY THAT'S THE CASE. AND SO – AND IT'S BEEN SO TALKED ABOUT YOU'D ASSUME IF IT WEREN'T THE CASE, SOMEBODY WOULD BE SAYING SOMETHING DIFFERENT. BUT WE'LL KNOW, I GUESS, ON THURSDAY. AND WE'LL ALL REACT TO THAT.

QUICK: LET ME ASK YOU. YOU MENTIONED THAT THIS IS SOMETHING THAT YOU HAVE MADE MONEY OVER THE PAST FEW DAYS.

MOYNIHAN: YEAH.

QUICK: WERE YOU REFERRING SPECIFICALLY TO THE CURRENCY MARKETS AND THE THINGS THAT HAPPENED IN THAT?

MOYNIHAN: YEAH AND THE CURRENCY MARKETS AND TRADING GENERALLY. THE VOLATILITY HELPS ACTIVITY. AND IF YOU KEEP YOUR EXPOSURES LOW. ANY ACTIVITY ACTUALLY HELPS GENERATE REVENUE AT THE TIME. SO WE ARE FINE. AND WE LOOK FORWARD TO GETTING TO THE OTHER SIDE AND LETTING THE ECONOMY ADJUST AND MARKETS ADJUST. BUT IT'S BEEN DISLOCATING FOR SOME FIRMS THAT HAVE BEEN WELL WRITTEN UP, AND FOR US IT WAS FINE.

QUICK: OBVIOUSLY THERE HAVE BEEN A LOT OF VOLATILE MARKETS, OIL ONE OF THE ONES PEOPLE HAVE BEEN WATCHING SO CLOSELY, TOO. WHAT IS BANK OF AMERICA'S EXPOSURE TO LOANS THAT HAVE BEEN MADE TO ANY OF THESE OIL COMPANIES THAT MAYBE COULD BE IN A LITTLE BIT OF TROUBLE AT THIS POINT?

MOYNIHAN: SO WE HAVE $900 BILLION LOAN PORTFOLIO AND OUR EXPOSURE IN OIL IS AROUND $40 BILLION THAT WE DISCLOSE. BUT A BIG PART OF THAT IS TO VERY LARGE COMPANIES THAT HAVE A LOT OF DIFFERENT REVENUE SOURCES OF WHICH OIL AND RELATED PRODUCTS IS ONE. BUT AS YOU LOOK AT IT, AND WE LOOK AT IT IN THE U.S. ESPECIALLY, YOU HAVE A PLUS AND MINUS. AND SO FROM BOTH OUR MACRO SENSE AND COMPANY SENSE, WE STRESS OIL DOWN TO 30, AND HOLD IT THERE FOR 18 MONTHS. WE DO ALL THIS WORK. IT'S PART OF WHAT THE REGIME OUT OF THE LAST CRISIS WAS TO KEEP STRESS TESTING YOURSELF ALL THE TIME. SO WE RUN THESE STRESSES CONSISTENTLY. HAVE BEEN RUNNING THEM. AND IT DOESN'T HAVE A HUGE IMPACT ON US. BUT THE QUESTION IS WHY IS IT FALLING AND THEN WHAT THAT BROADER EFFECT IN THE ECONOMY. AND IF YOU LOOK AT THE CONSUMER SIDE, IT'S BEEN PRETTY REMARKABLE. AND JUST LOOKING AT DATA FROM LAST WEEK, OIL SPENDING, YOU KNOW, EFFECTIVELY IS DOWN OVER A DOLLAR A GALLON. BUT THE CONSUMERS ARE SPENDING THAT MONEY, PLUS MORE. AND THAT MEANS THAT CONSUMERS ARE BENEFITTING BY THIS AND GOING OUT AND SPENDING MONEY, WHICH IS GOOD FOR THE BROAD COMPANY. IN A COMPANY LIKE OURS, WHICH HAS A LOT MORE CONSUMER EXPOSURE THAN WE DO OIL COMPANY EXPOSURE, IT WILL BE THE BENEFIT LONG TERM.

QUICK: WELL, I DID WANT TO ASK YOU ABOUT THAT. JUST YOUR VIEW OF THE CONSUMER IS A VERY GOOD ONE. BANK OF AMERICA, OBVIOUSLY, WHAT DO YOU HAVE? ABOUT HALF OF ALL HOUSEHOLDS THAT YOU SEE IN ONE FORM OR ANOTHER THROUGH BANKING, THROUGH LOANS? WE LOOKED AT RETAIL SALES AND IT WAS A LITTLE BIT OF A SHOCKER TO SEE THAT RETAIL SALES WERE DOWN IN DECEMBER. I KNOW THAT'S BECAUSE OF LOWER GAS PRICES, BUT WHAT'S THE CONSUMER FEEL LIKE TO YOU? HOW HEALTHY ARE THEY?

MOYNIHAN: WELL, WE DIDN'T SEE ANY BREAK FROM THE HEADLINE NUMBER IN NOVEMBER, DECEMBER AND INTO JANUARY SO FAR OF ABOUT 3% FAIRLY STATED COMBINED SPENDING ON DEBIT AND CREDIT CARDS. IF YOU DIDN'T HAVE THE OIL DOWNDRAFT – THAT IS COMPARED TO A YEAR AGO – AND IF YOU DIDN'T HAVE THE OIL COST DOWNDRAFT IT WOULD ACTUALLY BE 4, 4.5% IN ACCELERATED. AND SO FAR, WE SEE THE CONSUMERS HAVE SPENT MORE MONEY. SO SOME OF THIS DATA IS GETTING – IT GETS DONE IN A WAY SOMETIMES WHICH IT GETS RESTATED AND THOUGHT THROUGH AGAIN, BUT WHAT WE SEE IN OUR CONSUMERS AS OF LAST FRIDAY IS THEY'RE SPENDING MORE MONEY THAN THEY DID LAST YEAR BY ABOUT 3%.

QUICK: DOES THAT MAKE SENSE THEN, TO LOOK AT THE TEN-YEAR AND LOOK AT A YIELD OF BELOW 2%, MAYBE 1.8%, 1.7%?

MOYNIHAN: YOU KNOW, I THINK THERE'S A LOT OF MARKET ACTIVITY GOING ON BASED ON THE VIEW OF WHEN THE FED AND THE RATE STRUCTURE WILL RISE, AND I THINK THAT HAS A LOT MORE TO DO WITH THE UNEMPLOYMENT AND YOU ARE SEEING THAT CONTINUE TO IMPROVE. AND THE QUESTION IS, IS IT IMPROVING FAST ENOUGH AS WAGE PRESSURES AND PEOPLE CAN EARN MORE MONEY SO THEY CAN SPEND? THIS IS AN U.S. CONTEXT, OBVIOUSLY. AND I THINK THAT THAT DEBATE IS GOING TO GO ON UNTIL THE FED DOES DO SOMETHING. SO EACH TIME, IF YOU WATCH, WE SORT OF COME INTO THE YEAR WITH A LOT OF OPTIMISM AND IT DEFLATES A LITTLE BIT AND THEN IT PICKS BACK UP. AND I THINK THIS YEAR WILL BE NO DIFFERENT AS WE LOOK THROUGH IT. BUT EVERYTHING WE SEE, YOU WOULD EXPECT THAT THE ECONOMY – OUR EXPERTS ARE AT 3.5 IN THE U.S. FOR 2015 VERSUS 2014 LAST YEAR.

QUICK: SURE.

MOYNIHAN: AND LAST YEAR WAS FLAT AND THEN RAISE INCREASED THE WHOLE YEAR. NEXT YEAR WE LOOK FOR IT TO INCREASE AGAIN. THAT MEANS THAT EVERYTHING WE SEE IS CONSTRUCTIVE AND FOR GROWTH. AND THAT ULTIMATELY MEANS THE FED WILL RAISE RATES. THE QUESTION OF WHEN WILL DEPEND ON ALL OF THE FACTORS THAT THEY TALK ABOUT.

QUICK: IT MEANS THAT THE FED WILL RAISE RATES. IF YOU LISTEN TO THE CONSENSUS, THEY WOULD HAVE THEM DO IT PROBABLY BY THE MIDDLE OF THE YEAR. BUT IF YOU LOOK AT WHAT'S HAPPENING AROUND THE GLOBE, IF THEY WERE TO RAISE RATES RIGHT NOW, WHAT WOULD THAT DO TO THE DOLLAR? WHAT WOULD THAT MEAN FOR OTHER DISLOCATION IN THE MARKET? AND DO THEY WATCH THOSE THINGS, TOO, DO YOU THINK?

MOYNIHAN: THEY TELL US WHAT THEY WATCH. THEY PUT IT OUT IN GREAT DETAIL. AND SO I THINK PREDOMINANTLY WHAT THEY'VE BEEN FOCUSED ON IS THE U.S. EMPLOYMENT. AND THEY WANT TO SEE, YOU KNOW, THE WAGES AND THINGS START TO HAVE PRESSURE. THE UNEMPLOYMENT RATE IS DOWN. THE UNDEREMPLOYMENT RATE IS DOWN. IF WE WERE HERE A COUPLE OF YEARS AGO, WE WOULD BE TALKING ABOUT THE UNDEREMPLOYMENT RATE AND THINGS LIKE THAT. WE SEE IT IN OUR WORKFORCE, THE JOB OPENINGS TURN OVER VERY QUICKLY. AND SO, YOU KNOW, I THINK THAT'S WHAT THEY'RE GOING TO LOOK AT MORE. THEY HAVE BEEN CLEAR ABOUT THAT. AND THEN THE IMPACT THEY HAVE TO TAKE INTO ACCOUNT ALL OF THESE OTHER IMPACTS, BUT I THINK THE KEY ONE IS U.S. LABOR ECONOMY IN THE SHAPE THAT THEY'D LIKE TO SEE, SO THAT THEY'LL HAVE THAT SUSTAINED SPENDING AND SUSTAINED CONSUMPTION.

QUICK: WE SPOKE WITH LLOYD BLANKFEIN RECENTLY. HE JOINED US MAYBE A WEEK, WEEK AND A HALF AGO, AND HE BROUGHT UP AN INTERESTING PERSPECTIVE. HE SAID LOOK, YOU HAVE TO LOOK AT IT AS A RISK MANAGER. AND FOR THE FED, IF THEY – HE'S FINE WITH THEM KEEPING RATES LOWER FOR LONGER BECAUSE IT'S ABOUT MAKING SURE THAT YOU DON'T GET YOURSELF IN A BAD POSITION. WOULD YOU AGREE WITH THAT TYPE OF LOGIC OR WOULD YOU LIKE TO SEE THEM RAISE RATES SOONER?

MOYNIHAN: LOOK, SELFISHLY, AS OUR COMPANY, WE'D MAKE MORE MONEY IF THEY RAISED RATES. BUT FOR THE GOOD OF THE AMERICAN ECONOMY, WHICH LONG TERM IS BETTER FOR OUR COMPANY. YOU KNOW, LET'S THINK ABOUT IT. THEY OUGHT TO RAISE RATES, AND THEY WILL RAISE IT, AND THEY HAVE BEEN CLEAR ABOUT THIS WHEN THE ECONOMY'S GROWING STRONG ENOUGH TO ABSORB IT, TO SLOW IT DOWN. BUT I THINK THIS IS NOT A NEW DIALOGUE. IF YOU GO BACK TO CHAIRMAN BERNANKE AND HIS DISCUSSION, THE UNKNOWN OF GOING BACKWARDS AND HAVING DEFLATION AND OTHER ISSUES, WHICH FIGURING A WAY OUT OF THAT IS TRICKY. I THINK AS LLOYD WOULD SAY, IS TO ERR TO THE RISK OF LET'S WORRY ABOUT THE UPSIDE POTENTIALLY GETTING OVERHEATED VERSUS THE DOWNSIDE BECAUSE IT'S SUCH A BIG ECONOMY. AND BY THE WAY, WITH THE REST OF THE WORLD NOT GROWING AS FAST, THE WORLD'S BECOME VERY DEPENDENT ON THE U.S. AND THAT CREATES A RISK FACTOR TO MAKE A MISTAKE. AND SO I THINK THAT ALL OF THAT FACTORS IN. AND I WOULD ASSUME THAT THEY DO LOOK LIKE IT AS A RISK MANAGER, THAT'S WHAT THEY ALL DO.

QUICK: OK. WELL, BRIAN, I WANT TO THANK YOU SO MUCH FOR YOUR TIME TODAY. I REALLY APPRECIATE YOU JOINING US.

MOYNIHAN: THANK YOU, BECKY.

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