Trump's Credit Card Interest Rate Cap: Financial Stocks Tumble

President Trump's proposal to cap credit card interest rates at 10% threatens a major revenue stream for U.S. and UK-listed lenders. This move has led to a decline in financial stocks, sparking investor concerns about interest-rate uncertainty. Analysts remain skeptical about the feasibility of the cap going into effect.

Financial stocks in the U.S. and UK-listed lenders saw a downturn on Monday following President Donald Trump's suggestion of a new 10% interest rate cap on credit cards. This initiative is set to challenge a significant revenue source within the industry, contributing to investor unease amidst ongoing interest-rate ambiguity.

On Friday, Trump advocated for the cap's implementation starting January 20, yet details about its enforcement remain vague. As the top U.S. lenders, JPMorgan Chase and Bank of America saw respective declines of 2.5% and 1.6% in early trading. Meanwhile, Citigroup experienced a 3.7% drop, and Wells Fargo a 1.5% decrease.

Despite the announcement, Wall Street analysts were doubtful about the cap's enactment, citing the necessity of congressional support and potential legal hurdles. UBS Global analysts noted that an Act of Congress would be essential for rate caps, as an executive order would likely face substantial legal challenges.

(With inputs from agencies.)