A rift has opened between Donald Trump and some of his billionaire supporters over the issue of credit card interest rates. Bill Ackman, a hedge fund manager who has backed Trump, publicly critiqued the president’s new 10% rate cap. While Ackman called the goal “worthy,” he warned that the policy would lead to a credit crunch. Trump announced the cap on Truth Social, setting a start date of January 20.
Ackman’s critique centers on the economics of lending. He argued that a 10% cap makes it impossible for banks to lend to subprime borrowers without losing money. As a result, he predicted that banks would cancel millions of cards, hurting the very people Trump wants to help. Ackman’s comments highlight the tension between Trump’s populist agenda and the views of the financial elite.
The banking industry shares Ackman’s concerns. Major financial associations issued a statement warning that the cap would “reduce credit availability” and damage the economy. They argued that the policy is a misguided attempt to interfere in the free market.
Senator Elizabeth Warren also criticized the move, calling it a “joke” without legislative action. She argued that Trump is trying to have it both ways: attacking the banks while refusing to pass laws that would actually regulate them. Warren challenged the president to prove that he is serious about reform.
Despite the billionaire backlash, Senator Josh Hawley supported the move. His praise for the cap suggests that Trump is prioritizing his working-class base over his wealthy donors on this issue. As January 20 approaches, the conflict between billionaires and populists is set to intensify.