Trump Escalates Fed Attacks and Threatens Credit Card Rate Cap as Markets Await Key CPI Data

Trump's Intensifying Criticism of the Federal Reserve

The Trump administration has ramped up its attacks on the Federal Reserve, with officials escalating rhetoric against Chair Jerome Powell. Federal Reserve officials are pushing back amid reports of DOJ subpoenas served to the Fed. This feud has reignited the 'Sell America' trade on Wall Street, contributing to market unease.[5]

Credit Card Interest Rate Cap Proposal Sparks Sector Selloff

President Trump announced plans to cap credit card interest rates at **10% for one year**, threatening Visa, Mastercard, American Express, and Citigroup with legal action if they fail to comply by January 20. Shares in these companies dropped sharply, with Citigroup down 3%, Visa and Mastercard also declining. The proposal aims to provide relief to consumers but has rattled financial stocks.[5]

Markets Brace for December CPI Data Release

Official December CPI inflation data is set for release at 8:30 a.m., just hours before Trump's economy speech in Detroit. November's CPI came in at a lower-than-expected **2.7%**, bolstering Trump's affordability narrative. Investors are watching closely for signs of cooling inflation amid ongoing labor market concerns.[6]

Trump Heads to Detroit for Major Economy Address

Trump is scheduled to deliver a key speech on the U.S. economy in Detroit, focusing on affordability and growth. Advisors Susie Wiles and team aim to shift public attention to economic issues amid the Fed tensions. The address follows delayed economic reports from the recent government shutdown.[1][6]

Government Shutdown Delays Key Economic Reports

Federal workers are racing to release delayed reports including retail sales, industrial production, housing starts, new home sales, and durable goods by end of January. The temporary spending bill from November 2025, which ended the 43-day shutdown, expires soon, raising shutdown risks. Congress faces pressure to pass a new spending bill.[1]

• Retail sales: Chicago Fed estimates show 0.3% rise in November (excluding autos).
• Industrial production: Up 0.2% in November after October decline.
• Employment: 64,000 jobs added in November, but 105,000 lost in October due to shutdown.

Recent Economic Data Highlights Resilience

Q3 GDP grew at a **4.3% annualized pace**, surpassing forecasts of 3.2% and marking the highest in two years. This growth beat expectations despite shutdown disruptions. Industrial output and retail estimates indicate steady consumer and production activity.[1]

Broader Market and Policy Context

Wall Street remains on edge with Fed angst driving volatility. Trump's speech coincides with ongoing tariff discussions and policy shifts like the One Big Beautiful Bill Act for infrastructure and tax incentives. Markets eye potential Fed rate stability into early 2026.[4][5]