New York, Jan 13, 2026, 11:55 AM EST — Regular session
- Shares of Bank of America slipped as traders grappled with new policy risks tied to credit-card pricing
- A steady U.S. inflation report left the interest-rate outlook uncertain for banks
- Investors are gearing up ahead of Bank of America’s upcoming quarterly results and guidance
Shares of Bank of America Corp (BAC) dropped 0.9% to $54.72 in late-morning trading Tuesday in New York, as investors weighed a proposed cap on credit-card interest rates.
The stock reacted after U.S. consumer prices rose 0.3% in December, matching expectations, with a 2.7% increase year-on-year. Core CPI, excluding food and energy, climbed 0.2% monthly and 2.6% annually. The Fed is widely expected to hold its policy rate steady at the Jan. 27-28 meeting, the report said. “The recent run of figures suggests inflation has peaked,” said Michael Pearce, chief U.S. economist at Oxford Economics. (Reuters)
For banks, rates directly affect net interest income — the gap between earnings on loans and securities and costs on deposits. The key issue now: will the current rate environment remain favorable enough to sustain margins as credit quality remains stable?
The bigger headline risk is political. On Monday, Bank of America dropped 1.6% in early trading after President Donald Trump proposed a one-year cap on credit-card interest rates at 10% starting Jan. 20; JPMorgan slid 2.5%, Citigroup tumbled 3.7%, and Wells Fargo declined 1.5%. “It would take an Act of Congress for such rate caps to be in place,” UBS Global analysts noted. (Reuters)
Bank trade groups are pushing back hard. The Electronic Payments Coalition warned that 82% to 88% of open credit-card accounts—those linked to credit scores under 740—would face closure or severe restrictions if a 10% interest rate cap is imposed. “A one-size-fits-all government price cap may sound appealing, but it wouldn’t help Americans,” said EPC executive chairman Richard Hunt. (Reuters)
Analysts warn the rate cap clashes with the fundamental economics of unsecured lending, especially hitting subprime borrowers with shaky credit. Truist Securities said, “We estimate it would swing the business to unprofitable if enacted, with subprime credit cards hardest hit.” (Reuters)
JPMorgan’s shares dropped roughly 2.8% on Tuesday despite beating quarterly profit forecasts. CFO Jeremy Barnum warned during the earnings call that a cap “would be very bad for consumers, very bad for the economy.” (Reuters)
Investors eye Bank of America’s net interest income trends, credit-card delinquencies, charge-offs, and any reserve changes for future loan losses. Expenses remain crucial, as does the outlook on deal fees and trading following a turbulent quarter for markets.
The policy overhang works both ways. Should Congress begin shifting the cap, issuers might respond by tightening credit limits, hiking annual fees, or scaling back rewards. These moves could dampen card growth and weigh on consumer spending. Worse delinquency trends would only pile on more pressure.
Bank of America is set to release its fourth-quarter 2025 earnings before the market opens Wednesday, with the report due around 6:45 a.m. ET. The company’s conference call will follow at 8:30 a.m. ET. Investors will be tuned in for any commentary on the credit-card cap and potential ripple effects ahead of Jan. 20. (Bankofamerica)
