M ore than 100 million cardholders would lose easy access to credit if a proposed 10% interest rate cap on late credit card payments is implemented. The proposal would result in more than half of all open credit card accounts being closed or having their credit lines reduced. This loss of access would specifically impact one-third of lower-income American adults with subprime or near-prime credit scores, including younger workers and those rebuilding after financial setbacks.
Related Brief 5h ago
monetary policy One rate cut is all that's left on the table as inflation shocks and political pressure collide at the Fed
One rate cut is all that remains within reach for the Federal Reserve this year, and even that is uncertain. Inflation pressures from a global supply shock — triggered by the six-week Iran conflict — have already pushed U.S. consumer prices to their fastest rise in nearly four years, driven by a record surge in gasoline and diesel. Crude oil prices have jumped more than 30%, feeding directly into household budgets and hardening inflation expectations. Short-term inflation expectations have ticked up, and the Fed, meeting in March, held its benchmark rate steady in the 3.50% to 3.75% range. Still, a majority of policymakers signaled at least one cut could be appropriate in 2024. Former Treasury Secretary Janet Yellen, speaking at the HSBC Global Investment Summit in Hong Kong, said that if she were attending the next FOMC meeting, she would write down one cut — later in the year — as her best guess. Yet markets have moved even further away from that view: traders have now priced out any chance of a 2024 cut, reversing earlier bets on two. The shift reflects not just inflation but growing concern over political interference. Former President Donald Trump has launched an aggressive campaign to pressure the Fed, criticizing Chair Jerome Powell and pushing to replace him with Kevin Warsh, whom Trump believes would deliver steep rate cuts. Trump has also targeted the Fed’s headquarters renovation, sending prosecutors from Jeanine Pirro’s office to inspect the project over cost concerns. Yellen, who chaired the Fed from 2014 to 2018, called the level of political pressure unprecedented, describing it as a threat to the central bank’s independence. With inflation limiting monetary flexibility and political forces testing institutional boundaries, the path to easier policy has narrowed to a single, fragile possibility.
Federal Reserve data shows that 37% of American adults cannot cover a $400 emergency expense from savings alone, making the credit card a primary safety net for these households. The impact of an interest rate cap is not limited to subprime borrowers; the study cited by Unleash Prosperity Now, which surveyed 75% of the U.S. credit card market, analyzed the effect of a proposed cap.
Related Brief 8h ago
trade policy Tariffs Could Return by July—But Rate Cuts May Be Needed Even Sooner
Reimposing Section 301 tariffs would increase import costs for goods from targeted countries. Higher import costs could be passed on to consumers in the form of higher prices for certain goods. U.S. Treasury Secretary Scott Bessent stated that Section 301 tariffs could be reimposed at previous levels by early July. The U.S. Supreme Court ruled President Trump’s retaliatory tariffs unlawful earlier this year. In response, the Trump Administration imposed a 10% tariff on various countries under Section 122 of the Trade Act. Section 301 of the Trade Act allows the U.S. to impose additional tariffs in response to unfair trade practices. A rate cut would reduce borrowing costs for consumers and businesses. The Fed’s benchmark rate is currently held at 3.50–3.75%. Bessent argued that core inflation, excluding food and energy, is falling. Falling core inflation creates room for the Federal Reserve to cut its benchmark interest rate. Lower borrowing costs would support consumer spending and business investment.
When Illinois imposed interest rate caps in 2021, access to credit cards for low-credit-rate households fell by more than one-third.
Related Brief Just now
fixed income Bond investors bet the U.S. can’t grow its way out of debt
Long-term U.S. Treasury yields are rising as investors bet the government can’t grow its way out of mounting debt. Short-term yields remain anchored by expectations the Federal Reserve will eventually cut rates, but the long end of the curve is under pressure from inflation, elevated oil prices, and a surge in deficit spending. The spread between five-year and 30-year Treasury yields was 96.9 basis points on Monday — down from 114 before the war but up from a conflict-driven low of 82. That movement reflects a growing trade: investors are buying short-dated debt while selling long-dated bonds, a strategy known as a curve steepener. They’re not betting on war escalation. They’re betting on its fiscal aftermath. The Pentagon is seeking over $200 billion in supplemental funding for the Iran war, on top of a $900 billion defense bill already signed for fiscal year 2026. That spending will require more Treasury issuance, and investors demand higher yields to hold that debt. Oil prices are expected to average $96 a barrel this year, sustaining inflation and weakening demand. That dynamic hurts growth and the labor market — conditions that point toward eventual rate cuts. But those cuts are no longer priced in. Rate futures now reflect just 6 basis points of easing in 2026, down from 55 before the war. The trade isn’t about volatility. It’s about arithmetic. The back end of the curve bears the cost of war finance.
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