New York
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Top Wall Street bankers during the Trump 2.0 era have tread carefully around the subject of politics generally and President Donald Trump specifically. The consensus has generally been: Smile and nod, stay in your lane, don’t become a target.
But when a Trump “affordability” proposal earlier this month targeted banks’ profit engine, the mood shifted. Publicly and forcefully, Wall Street executives were telling Trump “no.”
It’s not going over well.
On Thursday, the notoriously litigious president sued JPMorgan Chase and its CEO, Jamie Dimon, alleging the bank improperly “debanked” Trump after the Jan. 6, 2021, assault on the US Capitol. Trump is seeking $5 billion in damages.
Trump has previously threatened the suit, which was likely in the works for months. But, perhaps not coincidentally, its filing in Florida state court came one day after Dimon told a room full of powerful people at the World Economic Forum in Davos, Switzerland, that Trump’s proposal to slash credit card interest rates roughly in half would be “an economic disaster.”
The White House referred questions about the case to Trump’s outside counsel, Alejandro Brito. His law firm didn’t immediately respond to a request for comment.
Dimon’s public critique breached what has become an unofficial, often uneasy, agreement among the leaders of Corporate America: Stay out of the Trump’s way, even when his policies directly affect the bottom line.
When Trump last spring rolled out steep global tariffs that threatened to sap corporate profits, executives stayed quiet. Ditto when Trump began going after the Federal Reserve, a body whose independence is vital for a stable business environment. Even when he started explicitly meddling in private companies, carving out a cut of revenue for the government from companies like Nvidia and Intel, no one spoke out.
Corporate America comes by its trepidation honestly. Since Trump’s second term began a year ago, he and his administration have investigated, sued or brought charges against an array of perceived enemies, including media companies like CBS, the New York Times, the Wall Street Journal. He threatened Apple with massive tariffs last year over a perceived slight from CEO Tim Cook, and Trump said he would block Exxon from entering Venezuela because Trump didn’t like CEO Darren Woods’ lack of enthusiasm during a meeting of oil executives earlier this month.
Privately, some trade groups were drafting plans to push back against the Trump administration in defense of their business interests, people familiar with the matter told CNN at the time. But those plans were shelved, as members worried about inviting the ire of the White House.
And CEOs across the board are “very alarmed” by the administration’s attack on the Fed’s independence, according to Jeffrey Sonnenfeld, founder of the Yale Chief Executive Leadership Institute. Sonnenfeld and his research team found that 80% of the CEOs they surveyed believed Trump was not acting in America’s best interest by pressuring Federal Reserve Chair Jerome Powell to cut interest rates. (Notably, that survey was conducted before the Department of Justice launched its criminal investigation into the bank and Powell.)
But for Wall Street, the president seemed to finally cross a red line with the proposed 10% cap on credit card rates. In a Truth Social post on Jan. 9, the president, who is struggling to convince voters that Republicans care about the cost-of-living crisis, said the public will no longer be “ripped off” by credit card companies, which charge an average interest rate of 20% on card purchase.
Even though such a cap would probably need to come from Congress, the statement rattled Wall Street, prompting rare critical public statements from executives.
“A rate cap is not something that we can support,” said Jane Fraser, CEO of Citigroup, on the bank’s earnings call.
Bank of America CEO Brian Moynihan — no stranger to being publicly dressed down by Trump — said last week that a cap wouldn’t have the effect Trump is seeking: “If you bring the caps down, you’re going to constrict credit, meaning less people will get credit cards and the balance available to them on those credit cards will also be restricted.”
But Dimon’s “economic disaster” statement at Davos was a more direct critique, coming from the most prominent figure on Wall Street, and someone who has had a rocky personal relationship with Trump.
Trump and Dimon have had an uneasy relationship for years.
In 2018, in a comment Dimon almost immediately walked back, the Wall Street titan told a panel at the bank’s headquarters that he “could beat Trump” in a head-to-head presidential race “because I’m as tough as he is, I’m smarter than he is.
Trump responded online, calling Dimon “a poor public speaker & a nervous mess.”
Dimon’s approach to the president during his second term has been far more measured. In his Davos interview, Dimon said he disagreed with some of Trump’s policies, agreed with others, but largely avoided a question about why he and other CEOs have been so unwilling to stand up to the president.
He may have seen the writing on the wall. After a tepid statement on JPMorgan’s earnings call disagreeing with Trump’s credit card rates plan (“it would be dramatic on subprime”) and his criminal investigation of Powell (“not a good idea”), Trump called out Dimon publicly.
“Jamie Dimon probably wants higher rates,” Trump said on January 15. “Maybe he makes more money that way.”
Two days later, after the Wall Street Journal reported that Trump had previously offered Dimon the Fed chair role, Trump announced he would sue.
“There was never such an offer and, in fact, I’ll be suing JPMorgan Chase over the next two weeks for incorrectly and inappropriately DEBANKING me after the January 6th Protest,” Trump said on Truth Social.
CNN’s Matt Egan, Chris Isidore and Phil Mattingly contributed reporting.
