Core Viewpoint - Credit card interest rates in the U.S. are at a 30-year high, averaging just under 21%, prompting President Trump to propose a 10% cap on these rates [1][2] Group 1: Legislative Proposals - President Trump has called for a one-year limit on credit card interest rates starting January 20 [2] - Senator Bernie Sanders has also been advocating for similar measures, indicating that this issue transcends partisan lines [2] Group 2: Opposition to the Proposal - Billionaire hedge fund manager Bill Ackman has criticized the proposed cap, labeling it a "mistake" that could lead to widespread cancellation of credit cards [3] - Ackman's argument highlights the complexities of financial markets, particularly regarding risk and the determinants of interest rates [3] Group 3: Economic Factors Behind High Rates - Credit card interest rates are influenced by default risk, as credit cards lack collateral, making them riskier for lenders [4] - The cost of borrowing for lenders is historically high, which subsequently affects consumers through elevated interest rates [5]

Core Viewpoint - The rise in interest rates in Japan is having a significant impact on global markets and may lead to increased borrowing costs in the U.S. [1] Group 1: Impact on Global Markets - Japan's interest rate hikes are causing fluctuations in global financial markets, indicating a potential shift in investor sentiment and capital flows [1] - The changes in Japan's monetary policy are expected to influence other central banks' decisions, particularly in developed economies [1] Group 2: U.S. Borrowing Costs - The increase in rates in Japan could lead to higher borrowing costs in the U.S., as investors reassess risk and return dynamics [1] - U.S. financial institutions may face pressure to adjust their lending rates in response to the changes in Japan's interest rates [1]

Structural forces are driving up the cost of borrowing, and they point to a world where 4.5% may be the new normal for 10-year Treasuries https://t.co/tqHA1Pt0OR ...