Wall Street CEOs Warn Trump To Stop Attacking The Fed And Credit Card Industry

Wall Street bank chiefs are pushing back against President Donald Trump’s new attacks on the Federal Reserve and his bid to clamp down on credit card profits, warning that his moves could destabilise markets and restrict access to credit rather than make life cheaper for consumers. Their message is that undermining Fed independence and imposing a hard 10% cap on card interest rates risk doing “more harm than good” to the US economy.​

What Trump is proposing

• The White House has backed a Department of Justice investigation into Fed Chair Jerome Powell, which many in finance see as an attempt to pressure or weaken an institution meant to set interest rates without political interference.​

• Trump has called for a one‑year nationwide cap of 10% on credit card interest rates, far below current average APRs of around 24%, saying Americans are being “ripped off” and that he wants the cap in place by 20 January.​

• He has also endorsed Senator Roger Marshall’s Credit Card Competition Act, aimed at cutting “swipe fees” that banks earn whenever a card is used at the checkout.​

Why Wall Street CEOs are angry

• Credit cards are a lucrative line of business for big banks, so a 10% cap could significantly hit revenue, especially from customers with weaker credit, and might force changes such as fewer rewards and tighter lending standards.​

• JPMorgan executives have warned that such a cap would “significantly” reduce the supply of credit and could ultimately hurt the very consumers it is supposed to help.​

• Industry groups argue that large parts of the credit card market would become unprofitable, prompting lenders to pull back from higher‑risk borrowers and small businesses.​

Concerns about the Federal Reserve

• CEOs including JPMorgan’s Jamie Dimon stress that “everyone we know believes in Fed independence” and caution that political interference or public pressure on the Fed could push up inflation expectations and long‑term interest rates.​

• BNY Mellon CEO Robin Vince has warned that targeting Powell and the Fed could “shake the foundation of the bond market” and actually raise borrowing costs instead of lowering them.​

• Many in finance worry that a politicised Fed would scare investors, inject volatility into bond and currency markets, and ultimately make mortgages and other loans more expensive.​

Political backdrop and what’s next

• Affordability and the cost of living are central themes for Trump heading into this year’s US midterm elections, so these fights with the Fed and card industry are also part of a broader populist pitch to voters.​

• Bank shares and card‑issuer stocks have already come under pressure on the proposals, reflecting investor fears about future profits and regulatory risk.​

• Despite the harsh rhetoric, analysts say it is unclear how a 10% cap would be implemented in practice or whether Congress, regulators, or the courts would allow such an aggressive move to stand.​

what a 10% cap would do

A hard 10% cap on credit‑card interest would likely cut bank profits sharply and restrict credit for higher‑risk borrowers, while giving lower‑risk, “transactor” customers cheaper borrowing but fewer perks and options. Most experts expect more people to lose access to mainstream cards or face new fees than to enjoy straightforward savings, especially among subprime and near‑prime consumers.​

Impact on banks

• The average US card APR is about 20–24%, so a 10% ceiling would wipe out a large share of interest income, with one estimate putting potential lost bank revenue around 100 billion dollars a year. Card‑focused issuers and big banks would see a major hit to a profitable business line, which is why their share prices fell after the proposal.​

• JPMorgan’s CFO and industry groups say large parts of the card portfolio, especially subprime balances, would become uneconomic, forcing lenders either to shrink those books or redesign products to earn revenue in other ways.​

Likely changes in credit availability

• Because lenders cannot be forced to lend, analysts expect banks to tighten standards and “reserve their cards for those with the best credit,” with some estimates suggesting roughly one‑third of consumers (about 47 million subprime borrowers) could be cut off from mainstream cards.​

• Research on interest‑rate caps in small‑loan and card markets finds that strict caps tend to reduce the supply of credit, especially for riskier borrowers, sometimes permanently reducing access as providers exit.​

How consumers could benefit

• For households that keep balances and still qualify for cards, a 10% cap could significantly lower interest costs and, in theory, save Americans up to about 100 billion dollars a year in reduced charges.​

• Caps can also curb lenders’ market power and limit very high “penalty” rates, which some models suggest can increase overall consumer surplus when caps are moderate rather than extremely tight.​

How consumers could be hurt

• If banks respond by raising annual fees, cutting rewards, or increasing minimum payments to offset lost interest, many borrowers could face higher upfront costs and a greater risk of delinquency, even if headline APRs fall.​

• Consumers denied mainstream cards may turn to less regulated, more expensive alternatives such as payday loans or buy‑now‑pay‑later plans, which industry and consumer‑finance analysts warn could leave vulnerable households worse off.​