Wall Street executives caution Trump: Cease criticism of the Federal Reserve and credit card sector

Wall Street’s Relationship with Trump Administration Takes a Turn

Until recently, financial markets have largely favored the policies introduced by the Trump administration, with Wall Street showing consistent support for the president. However, that alliance has quickly deteriorated.

When President Donald Trump signed the One Big Beautiful Bill into law in July, it ushered in another wave of tax reductions and significantly slashed the Consumer Financial Protection Bureau’s budget—an agency often at odds with the banking sector. Additionally, Trump’s regulatory officials have advanced a deregulatory agenda that has been warmly received by both banks and major corporations.

Now, the president has introduced a proposal to impose a one-year, 10% limit on credit card interest rates, a highly profitable area for many banks. At the same time, his Department of Justice has opened an investigation into Federal Reserve Chair Jerome Powell, a move many believe threatens the central bank’s independence from political influence.

Bank Leaders Voice Concerns

On Tuesday, top executives from major banks cautioned the White House that these new initiatives could ultimately damage the U.S. economy.

Robin Vince, CEO of BNY Mellon, remarked to the press that undermining the Federal Reserve’s autonomy “doesn’t appear to help the administration’s main goals, such as making life more affordable, lowering borrowing costs, or reducing mortgage expenses for Americans.”

Vince further warned, “We shouldn’t destabilize the bond market or risk actions that could actually drive interest rates higher due to diminished trust in the Fed’s independence.”

For large banks, the Federal Reserve’s ability to operate independently is considered essential. While banks may have disagreed with some of Powell’s decisions, they have generally respected his reasoning.

“I don’t agree with every decision the Fed has made, but I have tremendous respect for Jay Powell as a person,” said Jamie Dimon, CEO of JPMorgan Chase, on Tuesday.

Targeting the Credit Card Industry

In addition to his criticism of the Fed, President Trump has set his sights on credit card companies. With affordability expected to be a central topic in the upcoming midterm elections, Trump has called for a 10% cap on credit card interest rates to take effect by January 20. It remains unclear whether he plans to achieve this through executive action or by pressuring the industry to comply voluntarily.

Currently, the typical credit card interest rate ranges from 19.65% to 21.5%, according to the Federal Reserve and industry analysts. Researchers at Vanderbilt University estimate that a 10% cap could cost banks approximately $100 billion in annual revenue. On Monday, shares of major credit card issuers—including American Express, JPMorgan, Citigroup, and Capital One—fell sharply as investors grew concerned about the potential impact on profits.

Industry Pushback Intensifies

During a media call, Jeffrey Barnum, Chief Financial Officer of JPMorgan, indicated that the banking sector is prepared to use all available means to oppose the proposed interest rate cap.

“We believe measures like this will have the opposite effect of what the administration intends for consumers,” Barnum stated. “Rather than making credit more affordable, it will simply reduce access to credit, which would be detrimental to consumers, the broader economy, and, of course, to us as well.”

President Trump appeared to escalate his criticism of the credit card industry overnight. On his social media platform, Truth Social, he expressed support for legislation introduced by Senator Roger Marshall of Kansas, which would likely reduce the fees banks collect from merchants for processing credit card transactions.

“Everyone should support the outstanding Republican Senator Roger Marshall’s Credit Card Competition Act to put an end to excessive swipe fees,” Trump posted.

Bank Earnings Amidst Tensions

These comments from Wall Street coincide with the release of quarterly earnings reports from major banks. JPMorgan, the largest U.S. consumer and investment bank, and The Bank of New York Mellon Corp., a leading global custodian, both announced their results on Tuesday. Other major institutions, including Citigroup, Bank of America, and Wells Fargo, are scheduled to report later in the week.