Khaberni - The New York Post reported an unprecedented escalation placing America's largest bank under the guillotine of political and legal accountability, after President Donald Trump formally threatened to sue JPMorgan Chase and its CEO Jamie Dimon. The conflict, which started its spark in “the corridors of banking” in 2021, has today transformed into a public opinion case affecting the core relationship between power and money.
Through his platform “Truth Social,” Trump announced that he is about to file a lawsuit within two weeks against the bank, accusing it of “de-banking” and depriving him of his right to manage his money. Trump alleges that the bank acted out of political motivation and under pressure from the Biden administration following the events of January 6, giving him only 20 days to move “hundreds of millions of dollars.”
“It was an inappropriate and illegal decision aimed at politically punishing me and drying up my funding sources under pressure from the White House.”
The conflict does not stop at the past; at the beginning of this week, Trump launched a “revolutionary” proposal to cap credit card interest rates at 10% for one year, which Jamie Dimon described as an “economic disaster.”
Meanwhile, Jerry Barnum, the bank's CFO, warned that this ceiling would force them to cut credit to poor families, which would lead to adverse effects harmful to both consumers and the economy. Meanwhile, the White House supports legislation that restricts bank profits, placing “JPMorgan” in the face of opposition from both Trump and regulatory pressures.
The major battle
Trump's threat coincided with JP Morgan's explicit criticism of the Department of Justice's investigations with Federal Reserve Chairman Jerome Powell. Dimon warned that “politicizing” the Federal or undermining its independence would raise inflation expectations and lead to increased interest rates, which Trump regarded as an attempt by the bank to protect the “old system.”
Reports indicate that the Florida Attorney General has already begun investigations into whether the bank collaborated with “government parties” to spy on or illegally freeze the accounts of Trump's supporters, which the bank outright denies.
It was a tough week for the American banking giant, as investors were awaiting strong earnings results while political tensions cast their shadows over trading screens, leading to a state of uncertainty which investors hate more than anything else.
Following Trump's litigation threats and his announcement of a proposal to cap credit card interest rates, JP Morgan's stock (JPM) saw a 4.2% drop in the session at the start of the week. The litigation threat was not the only driver, but also the concern that the “10% cap” would directly hit the profits of the retail banking sector, which forms a fundamental pillar of the bank's profits.
The bank lost billions of dollars in market value within hours, dragging the “KBW” bank index into the red zone.
