A significant rift has opened between Wall Street and the White House, as major bank CEOs publicly warned President Donald Trump that his recent attacks on the Federal Reserve and a proposed cap on credit card interest rates will harm the American economy.
From Ally to Adversary: Wall Street's Sudden Shift
Until recently, the financial sector had largely benefited from and supported the Trump administration's policies. Key measures like the One Big Beautiful Bill signed in July 2025 delivered substantial tax cuts and slashed the budget of the Consumer Financial Protection Bureau, a frequent industry critic, by nearly half. A broader deregulatory agenda was also welcomed by banks and large corporations.
However, the relationship soured dramatically this week. The president has now proposed a one-year, 10% cap on credit card interest rates, a core profit driver for many institutions. Simultaneously, his Department of Justice has launched an investigation into Federal Reserve Chair Jerome Powell, a move widely seen as threatening the central bank's cherished political independence.
CEOs Issue Stark Economic Warnings
In response, bank leaders delivered a blunt message to the White House on Tuesday. BNY Mellon CEO Robin Vince cautioned that targeting the Fed undermines the administration's own goals. "Going after the Fed’s independence doesn’t seem, to us, to be accomplishing the administration’s primary objectives for things like affordability," Vince told reporters. He warned that shaking confidence could paradoxically push interest rates higher.
JPMorgan Chase CEO Jamie Dimon expressed respect for Powell while distancing himself from the political assault. "I don’t agree with everything the Fed has done. I do have enormous respect for Jay Powell, the man," Dimon stated.
The High Stakes of a Credit Card Crackdown
The proposed 10% interest rate cap represents a direct threat to bank revenues. With the average credit card rate currently between 19.65% and 21.5%, researchers at Vanderbilt University estimate a cap could cost banks roughly $100 billion in lost annual revenue. This fear triggered sharp declines in the stock prices of major credit card issuers like American Express, JPMorgan, and Citigroup.
JPMorgan CFO Jeffrey Barnum indicated the industry is prepared for a fight, arguing the cap would backfire. "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," Barnum said.
Trump doubled down overnight on his social media platform, Truth Social, endorsing Senator Roger Marshall's Credit Card Competition Act, which aims to cut the "swipe fees" banks earn from merchants.
The warnings from Dimon and Vince coincided with the start of quarterly earnings season for major banks. The public rebuke from traditional allies signals a new phase of tension between the Trump administration and the financial heart of the American economy.
