Wall Street executives warn Trump: Stop attacking the Fed and credit
card industry
[January 14, 2026]
By KEN SWEET
NEW YORK (AP) — Up until this week, Wall Street has generally benefited
from the Trump administration’s policies and has been supportive of the
president. That relationship has suddenly soured.
When President Donald Trump signed the One Big Beautiful Bill into law
in July, it pushed another significant round of tax cuts and also cut
the budget of the Consumer Financial Protection Bureau, at times the
banking industry's nemesis, by nearly half. Trump’s bank regulators have
also been pushing a deregulatory agenda that both banks and large
corporations have embraced.
But now the president has proposed a one-year, 10% cap on the interest
rate on credit cards, a lucrative business for many financial
institutions, and his Department of Justice has launched an
investigation into Federal Reserve Chair Jerome Powell that many say
threatens the institution that is supposed to set interest rates free of
political interference.
Bank CEOs warned the White House on Tuesday that Trump’s actions will do
more harm than good to the American economy. But in response, Trump did
not back down on his proposals or attacks on the Fed.
BNY Chief Executive Officer Robin Vince told reporters that going after
the Fed’s independence “doesn’t seem, to us, to be accomplishing the
administration’s primary objectives for things like affordability,
reducing the cost of borrowing, reducing the cost of mortgages, reducing
the cost of everyday living for Americans.”
“Let’s not shake the foundation of the bond market and potentially do
something that could cause interest rates to actually get pushed up,
because somehow there’s lack of confidence in the Fed’s independence,”
Vince added.
The Federal Reserve’s independence is sacrosanct among the big banks.
While banks may have wanted Powell and other Fed policymakers to move
interest rates one way or another more quickly, they have generally
understood why Powell has done what he's done.
“I don’t agree with everything the Fed has done. I do have enormous
respect for Jay Powell, the man,” JPMorgan Chase CEO Jamie Dimon told
reporters Tuesday.
Dimon's message did not seem to resonate with President Trump, who told
journalists that Dimon is wrong in saying it’s not a great idea to chip
away at the Federal Reserve’s independence by going after Chair Jerome
Powell.
“Yeah, I think it’s fine what I’m doing,” Trump said Tuesday in response
to a reporter’s question at Joint Base Andrews after returning from a
day trip to Michigan. He called Powell “a bad Fed person” who has “done
a bad job.”
Along with the attacks on the Fed, President Trump is going after the
credit card industry. With “affordability” likely to be a key issue in
this year’s midterm elections, Trump wants to lower costs for consumers
and says he wants a 10% cap on credit card interest rates in place by
Jan. 20. Whether he hopes to accomplish this by bullying the credit card
industry into just capping interest rates voluntarily, or through some
sort of executive action, is unclear.
The average interest rate on credit cards is between 19.65% and 21.5%,
according to the Federal Reserve and other industry tracking sources. A
cap of 10% would likely cost banks roughly $100 billion in lost revenue
per year, researchers at Vanderbilt University found. Shares of credit
card companies like American Express, JPMorgan, Citigroup, Capital One
and others fell sharply Monday as investors worried about the potential
hit to profits these banks may face if an interest rate cap were
implemented.
[to top of second column]
|
Jamie Dimon, CEO of JPMorgan Chase, speaks at the America Business
Forum, Thursday, Nov. 6, 2025, in Miami. (AP Photo/Rebecca
Blackwell, file)
In a call with reporters, JPMorgan’s Chief Financial Officer Jeffrey
Barnum indicated the industry was willing to fight with all
resources at its disposal to stop the Trump administration from
capping those rates. JPMorgan is one of the nation's biggest credit
card companies, with its customers collectively holding $239.4
billion in balances with the bank, and having major co-brand
partnerships with companies such as United Airlines and Amazon.
JPMorgan also recently acquired the Apple Card credit card portfolio
from Goldman Sachs.
“Our belief is that actions like this will have the exact opposite
consequence to what the administration wants in terms of helping
consumers,” Barnum said. “Instead of lowering the price of credit,
it will simply reduce the supply of credit, and that will be bad for
everyone: consumers, the broader economy, and yes, for us, also.”
Even the major airline and hotel partners who partner with banks to
issue their cards were also not pleased with the White House's push
to cap interest rates.
“I think one of the big issues and challenges with (a potential cap)
is the fact that it would actually restrict the lower end consumer
from having access to any credit, not just what the interest rate
they’re paying, which would upend the whole credit card industry,”
said Ed Bastion, CEO of Delta Air Lines, to analysts on Tuesday.
Delta has a major partnership with American Express, and its
co-brand credit card brings in billions of dollars in revenue for
Delta.
Trump seemed to double down on his attacks on the credit card
industry overnight. In a post on his social media platform Truth
Social, he said he endorsed a bill introduced by Sen. Roger
Marshall, R-Kansas, that would likely cut into the revenue banks
earn from merchants whenever they accept a credit card at
point-of-sale.
“Everyone should support great Republican Senator Roger Marshall’s
Credit Card Competition Act, in order to stop the out of control
Swipe Fee ripoff,” Trump wrote.
Trump told reporters Tuesday that he was not going to back down the
credit card interest rate issue.
“We should have lower rates. Jamie Dimon probably wants higher
rates. Maybe he makes more money that way,” Trump said.
The comments from Wall Street are coming as the major banks report
their quarterly results. JPMorgan, the nation’s largest consumer and
investment bank, and The Bank of New York Mellon Corp., one of the
world’s largest custodial banks, both reported their results Tuesday
with Citigroup, Bank of America, Wells Fargo and others to report
later this week.
All contents © copyright 2026 Associated Press. All rights reserved
 |
