Since President Trump began his second term, Wall Street and the administration enjoyed a honeymoon period, largely due to the White House's tax cuts and deregulatory policies. However, the relationship has recently taken a sharp turn for the worse. A criminal investigation into Federal Reserve Chair Jerome Powell has sparked fears on Wall Street that the independence of monetary policy is being undermined. Furthermore, facing mounting pressure over the cost of living ahead of the midterm elections, the Trump administration's proposal to cap credit card interest rates at 10% for one year has significantly widened the rift between the two sides.
On the 11th, after Powell disclosed that the Justice Department had issued a subpoena to the Fed, JPMorgan Chase CEO Jamie Dimon publicly came to his defense, stating, "I don't agree with everything the Fed does, but anything that undermines its independence is probably not a good thing." As one of America's most influential CEOs, Dimon has consistently worked to maintain good relations with the White House and has publicly supported most of Trump's agenda. Yet, on the 13th, Trump issued a "blunt" rebuttal to Dimon's comments, asserting, "We should have lower rates. Dimon might want higher rates, maybe so he can make more money."
On the same day, CEOs from several major Wall Street banks again warned the White House that Trump's actions would do more harm than good for the U.S. economy. In response to these warnings, Trump showed no sign of retreating from his policy stance or his critical position toward the Fed. Bank of New York Mellon CEO Robin emphasized that attempts to weaken the Fed's independence "do not achieve the government's goal of reducing the daily living expenses of Americans."
Beyond criticizing the Fed, Trump has also targeted the credit card industry, escalating his rhetoric against Wall Street. "Everyone should support the outstanding Republican Senator Roger Marshall's proposed 'Credit Card Competition Act' to stop runaway 'swipe fee' fraud," he declared. Currently, the average credit card interest rate in the U.S. is approximately 19.6%, with some cards charging as high as 30%. On his social media platform, Truth Social, Trump posted that the government "will no longer allow the American public to be 'extorted' by credit card companies with 20% to 30% interest rates." He proposed capping annual credit card rates at 10% and expressed his desire for the policy to be implemented before January 20th.
In response, major financial institutions like Citigroup and Wells Fargo have voiced strong opposition. Citigroup Chief Financial Officer Mark Mason pointed out that forcibly setting an interest rate cap would "limit credit access for those who need it most in the market," have "unintended consequences" for consumers, and could even lead to a "noticeable economic slowdown." Wells Fargo Chief Financial Officer Santomassimo also warned that the move would have a "significantly negative impact" on credit access for the general public and would restrain economic growth.
Analysts suggest that Trump's push to lower consumer borrowing costs at this time is, in reality, an attempt to find an alternative path in his power struggle with the Fed. After failing on multiple occasions to pressure the Fed into cutting interest rates, he is now directly intervening in the credit market to address voter dissatisfaction with soaring living costs. Cato Institute researcher Jai Kedia stated, "The President knows that high borrowing costs will be a key election issue, so he is trying to alleviate the pressure by reducing the cost of accessing money."
However, on the 13th, U.S. House Speaker, Republican Mike Johnson, poured cold water on the new credit card policy. He described it as a "complex issue" requiring "a lot of work to reach a consensus," indicating that the proposal is unlikely to be implemented in the short term.