The White House Is Threatening Card Issuers Again. Time to Buy Bank Stocks?

Core Viewpoint - The Trump Administration is pressuring credit card issuers to lower high-interest rates, with a proposed cap of 10% on credit card interest rates, which would require Congressional action to implement [1][4]. Group 1: Government Pressure and Legislative Context - White House trade advisor Peter Navarro publicly criticized credit card companies for charging interest rates as high as 30%, echoing President Trump's earlier call for a 10% cap on rates [1][2]. - The proposal to cap credit card interest rates faces significant opposition from the financial industry, which has historically resisted similar legislative efforts [4]. Group 2: Market Reaction - Following Navarro's statements, share prices of major credit card issuers declined significantly, with Bank of America down 8%, JPMorgan Chase down 6.9%, and Citigroup down 9.9% over the week [5]. - The performance of major card payment networks also suffered, with Visa falling 3.6% and Mastercard down 4.7% during the same period [6]. Group 3: Interest Rate Outlook - Despite the pressure on credit card issuers, the outlook for bank and financial industry stocks remains positive due to anticipated interest rate cuts by the Federal Reserve, which could benefit these stocks in the long term [7].