On Tuesday, President Donald Trump gave a speech on the economy in Detroit, touting his administration’s record so far. Among the goals was to highlight what the White House is doing to bring down prices.
Core inflation, which excludes food and energy prices, has been lower than economists predicted for the past couple of months. But Americans burned by the rapidly rising prices of the last several years have said in recent polls they don’t believe Trump is doing enough to bring prices down.
The affordability push has created new risks for major banks and investors, who until now have benefited greatly from tax cuts, deregulation and other moves the White House made in 2025.
During the Detroit speech, Trump touted his promise to ban institutional investors from buying single-family homes. Trump also repeated that he would cap credit card interest rates at 10% for one year, a move that immediately caused bank stocks to tank when the president announced it.
His Justice Department, meanwhile, is investigating Federal Reserve Chairman Jerome Powell, a move that is widely seen as part of an longstanding attempt to pressure him to lower interest rates. That effort could spook the bond market by raising questions about the Fed’s independence.
Trump said on Tuesday he will announce other plans to lower costs in coming days. That includes initiatives to reduce healthcare costs and to make housing cheaper.
“In the coming weeks I will be laying out even more plans to help bring back affordability. And remember that is a fake word by Democrats,” Trump said in his Detroit speech, arguing that Democrats caused the higher prices.
The White House has said that Trump will give a major speech on affordability at the World Economic Forum in Davos, Switzerland, later this month.
The single-family-home and credit-card announcements, both of which have been goals of Democrats including Sen. Elizabeth Warren (D., Mass.), jarred Wall Street lobbyists and traditional conservatives.
“This feels to me like someone who’s grabbing things and trying to see what sticks to make the electorate happier about the economy,” said Douglas Holtz-Eakin, president of the American Action Forum, a center-right policy group.
The coming midterm elections in part likely are driving Trump’s turn against banks, analysts say.
“When in political trouble, Trump tends to emphasize populist policies,” wrote TD Cowen analysts in a research note, citing Trump’s support of not taxing tips and overtime during his 2024 presidential campaign.
In addition to the credit-card cap, unexpected moves the president could make include a push to break up big banks, a crackdown on bank and credit-card fees, or forcing the sale of homes owned by private equity, rather than just banning such purchases, the analysts wrote.
Wall Street is an easy target in the affordability push, Holtz-Eakin said. Politically, “it’s important to punch a villain. No question,” he said.
Both the single-family home investor ban and the credit-card rate cap could require new legislation, and some Republican lawmakers have already distanced themselves from some of the plans. Congressional leaders already say they’re willing to put the issue on the agenda, however.
“My assumption is at some point it probably gets voted on, and I think that is what we do around here,” Senate Majority Leader John Thune (R., S.D.) told reporters on Tuesday. “We cast hard votes. We should be.”
Some analysts think that if Trump chooses to, he could likely win GOP lawmakers’ support, as he has on other controversial issues in the past.
“It’s not a slam dunk but this is a viable proposal,” said L. Thomas Block, Washington policy strategist for Fundstrat, citing Trump’s hold over the Republican party. “This would not be a fun time to be in government relations for a major bank.”
So far, Wall Street’s reaction to the proposals has been a mix of derision and disbelief. In a joint statement, bank trade groups including the American Bankers Association and the Independent Community Bankers of America said “evidence shows that a 10% interest rate cap would reduce credit availability and be devastating for millions of American families” by making credit less available to them.
“So far the markets seem to think this is all too insane to take seriously. Hence little reaction,” said a Wall Street lobbyist, who said that some financial services executives have decided to stay silent for fear that their own firms become a target of Trump’s ire. “If they’re proven wrong, that would be a very bad situation.”
Write to Joe Light at joe.light@barrons.com
