Donald Trump continues to reshape the Republican economic platform, announcing a 10% cap on credit card interest rates that has drawn cheers from the populist wing of the party. In a Truth Social post on Friday, the former president declared that the new policy would take effect on January 20. He framed the move as a defense of the “American Public” against corporate exploitation, targeting interest rates of 20-30% that he claims have gone unchecked.
The announcement garnered immediate support from Senator Josh Hawley, a leading figure in the GOP’s populist movement. Hawley took to X to call the proposal a “fantastic idea,” signaling a deepening alliance between Trump and lawmakers who favor market intervention to help working families. This stance puts them at odds with traditional free-market conservatives who typically oppose price controls.
However, the economic establishment is pushing back hard. A coalition of major banking associations issued a joint statement warning that the cap would be “devastating” for credit availability. They argued that interest rates are a necessary tool for managing risk, and that capping them at 10% would force banks to stop lending to millions of consumers with lower credit scores. The industry groups predicted that the policy would ultimately harm the very people it aims to assist.
Senator Elizabeth Warren offered a sharp critique from the left, calling the announcement a “joke” without legislative backing. She argued that Trump is engaging in political theater rather than doing the hard work of governing. Warren emphasized that without a law passed by Congress, the banks are unlikely to comply with a simple social media declaration.
As the January 20 date approaches, the tension between populist politics and economic reality is palpable. Investor Bill Ackman warned that the cap could lead to a credit crunch, with banks canceling cards to protect their bottom line. The coming weeks will reveal whether Trump’s populist gamble pays off or if it triggers a backlash from the financial markets.