In an announcement that could potentially ease the financial burden of countless families, Donald Trump revealed on Friday that mortgage rates have decreased to 5.7%. He also declared his intention to propose a temporary 10% cap on credit card interest rates starting January 20, 2026.
Trump made these announcements via his platform, Truth Social, where he accused the Biden administration of allowing mortgage rates to hover around 8%, effectively excluding many young families from the housing market.
The former president attributed the alleged reduction in rates to his "housing affordability" policies and the decision to permit Fannie Mae and Freddie Mac to invest up to $200 billion in mortgage bonds.
"This is tremendous news for American families and a genuine cost relief," Trump stated, reinforcing his economic recovery narrative while drawing a contrast to the previous administration.
His statement regarding credit card interest rates has sparked more controversy. Trump pledged to prevent Americans from being "ripped off" by companies charging between 20% and 30%, advocating for a 10% cap for a year. However, he did not elaborate on how this measure would be enacted or enforced with banks.
Publications like The Guardian and CNBC highlighted that the president cannot unilaterally impose such a cap without Congressional approval, a point emphasized by key figures such as Democratic Senator Elizabeth Warren.
“Asking credit card companies to play nice is a joke,” Warren remarked, pointing out Trump's attempts to weaken the Consumer Financial Protection Bureau.
The announcement comes amid a challenging backdrop, as U.S. credit card debt surpassed a staggering $1.17 trillion in 2024, a figure that disproportionately impacts working families.
Notably, senators from both parties, including Bernie Sanders and Republican Josh Hawley, have proposed legislation to limit interest rates, but these efforts have been thwarted by strong opposition from banking groups.
Criticism has also emerged from the financial sector. Investor Bill Ackman, a Trump supporter, cautioned that a 10% cap could result in widespread card cancellations, particularly affecting consumers with subprime credit.
Banking associations warned that such a measure would limit credit availability and drive consumers toward more expensive and less regulated alternatives.
Understanding Trump's Economic Proposals
What are Trump's proposed changes to mortgage rates?
Trump announced that mortgage rates have fallen to 5.7%, attributing this to his housing affordability policy and investments by Fannie Mae and Freddie Mac.
How does Trump plan to cap credit card interest rates?
Trump proposed a temporary 10% cap on credit card interest rates for one year, though he hasn't detailed the implementation process or how banks would be compelled to comply.
What challenges does Trump's credit card interest cap face?
The cap faces significant hurdles since it requires Congressional approval, which is uncertain given the opposition from banking lobbyists and some lawmakers.