Financial markets reacted with volatility following former President Donald Trump's social media announcement proposing a one-year freeze and a 10% cap on credit card interest rates, effective January 20th. The proposal, made on Truth Social, immediately rattled investors in major financial institutions, fearing a significant hit to the lucrative revolving credit business that drives profits for card issuers.
American Express (AXP) shares slipped on the news, though analysts were quick to point out the company's unique positioning. Unlike banks heavily reliant on high-interest revolving debt from subprime borrowers, American Express focuses on affluent transactors who often pay their balances in full, making it less vulnerable to the proposed cap. Wall Street maintains a bullish "overweight" consensus on AXP, with price targets as high as $462, citing resilient spending trends among its premium clientele and upcoming Q4 earnings expected to show a 17% year-over-year increase.
JPMorgan Chase (JPM) entered the fray directly, with CFO Jeremy Barnum stating on an earnings call that the bank could "fight" the proposed directive. Barnum argued that such a cap, if implemented, would reduce credit availability and push borrowers toward riskier, less-regulated alternatives, ultimately harming the economy. He emphasized that "everything's on the table" to oppose what the bank views as an unjustified radical change. JPMorgan's stock also faced pressure from a surprise decline in Q4 investment banking fees.
The banking industry has precedent for such a fight, having successfully blocked similar efforts by the Consumer Financial Protection Bureau (CFPB) and congressional bills in 2025. Analysts note that implementing Trump's proposal would require congressional action, which is considered unlikely. The consensus rating on JPM remains "overweight," with a mean price target around $344.
