Big banks announce financial results while Trump's credit card strategy introduces a fresh challenge

Major Banks Set to Reveal Strong 2025 Performance

This week marks the start of earnings season for the nation’s largest banks. JPMorgan Chase will kick things off on Tuesday morning, with Bank of America, Citigroup, and Wells Fargo following on Wednesday. The week wraps up with Goldman Sachs and Morgan Stanley reporting on Thursday.

Key Trends to Monitor

Analysts are anticipating exceptional results from the big banks, thanks to a year marked by rising asset values and increased market swings that benefited the wealthiest participants in the k-shaped economy. Projections call for record-breaking annual profits, fueled by surging trading activity, a rebound in deal-making, and robust loan demand.

These strong financials, combined with expanding valuations, have already driven bank stocks upward. In 2025, all six leading banks outperformed the S&P 500, with some posting significant gains. The KBW Nasdaq Bank Index jumped by about 30%, far outpacing the S&P’s 17% rise. Some experts are now predicting that banks could beat the market for a third straight year in 2026, a streak not seen since the late 1990s and early 2000s.

This optimism is based on several familiar drivers. Chief among them is the expectation that interest rates will fall later in 2026, which could boost both lending and risk-taking. Continued strength in investment services and wealth management is also expected to support growth.

Trump’s Interest Rate Proposal Sparks Uncertainty

Despite the positive outlook, a new source of uncertainty has emerged. Over the weekend, President Donald Trump declared that credit card companies would be “breaking the law” if they did not limit interest rates to 10% for a year, as he demanded. No official policy or legislation has been enacted, making this a dramatic and unconventional request targeting one of consumer banking’s most lucrative areas. Credit card interest rates have hovered near 20% in recent years, and Trump set a January 20 deadline for compliance.

Shares of major credit card issuers fell ahead of Monday’s market open, dragging down the broader banking sector. While industry lobbying and legal action would likely delay or block any enforcement, the episode highlights the sector’s vulnerability to political risk and sudden policy shifts. Some analysts suggest the White House’s comments may be intended to pressure banks into negotiations rather than to impose an actual rate cap.

It’s important to note that credit card interest rates are determined by a complex web of longstanding laws, regulatory bodies, and Supreme Court decisions. In short, the president lacks the unilateral authority to impose a nationwide cap without congressional approval. As a result, these remarks are seen more as political theater or an attempt to apply pressure, rather than a concrete policy shift.

Will CEOs Hold Back on Earnings Calls?

This political tension is likely to cast a shadow over this week’s earnings calls, potentially prompting top executives to be even more guarded in their public statements about policy and the economy.

While bank leaders are expected to report a stellar year of results, they will also likely face questions about whether parts of their business—especially consumer credit—are becoming political flashpoints.