President Trump Takes Affordability Fight to Davos

President Donald Trump’s wide-ranging address at the World Economic Forum in Davos on Wednesday (Jan. 21) drew headlines for its geopolitical content but was also notable for its  coverage of key domestic economic themes.

Embedded in the speech were repeated references to the U.S. economy and the pressures facing American households. In remarks spanning inflation, credit cards, interest rates and homeownership, Trump framed affordability as an economic priority.

Trump opened his economic case by arguing that inflation has receded sharply since his return to office. He described the current period as one of rising incomes and falling price pressures, saying, “inflation has been defeated,” as part of what he called a rapid economic turnaround.

Those claims on inflation and growth formed the backdrop for his repeated references to household affordability. Trump argued that easing price pressures are already visible in key consumer categories. “Grocery prices, energy prices, airfares, mortgage rates, rent, and car payments are all coming down, and they’re coming down fast,” he stated.

Trumps remarks Wednesday came against a backdrop where, as PYMNTS Intelligence has found, more than two-thirds of U.S. consumers live paycheck to paycheck. The speech also followed a discussion of affordability issues by PYMNTS CEO Karen Webster. Webster cited rising prices as a nearly universal concern cited by 87% of all consumers, according to PYMNTS Intelligence.

“Whether a consumer is making $40,000 or $150,000, they’re going to the same grocery stores, buying the same stuff, watching the prices climb. The difference is that at $150,000, the grocery bill going from $600 to $800 per month is irritating. At $40,000, it’s unmanageable,” Webster wrote, explaining that affordability decisions increasingly center on sequencing how to pay for necessities and on managing cash flow.

Credit Cards and the Cost of Borrowing

The most direct comments from the president on consumer finance were centered on credit cards and interest rates. Trump described revolving credit costs as a major obstacle to saving and financial stability. “One of the biggest barriers to saving for a down payment has been surging credit card debt,” he contended, pointing to interest rates that, in his words, now reach “28%, 30%, 31%, 32%.”

He framed those rates as historically abnormal, asking, “What has happened to usury?” Trump argued that high credit card rates amplify financial stress for households already managing elevated costs of living. He also criticized credit card economics, stating, “The profit margin for credit card companies now exceeds 50%.”

To address those pressures, Trump said he is urging Congress to intervene, repeating policy objectives he made earlier this month.

“I’m asking Congress to cap credit card interest rates at 10% for one year,” he said, describing the proposal as a temporary measure to help households regain footing. According to Trump, the goal is to free up cash flow so families can rebuild savings and prepare for larger purchases such as homes. He presented the move as one that also might help some card holders, adding that “they have no idea they’re paying 28%. They go out there a little late in their payment, and they end up losing their house. It’s terrible.”

Bank Opposition

Since the rate cap proposal made headlines this month, bank executives have come out in opposition to the move. During recent earnings calls, for example, Bank of America CEO Brian Moynihan said that “the explanation we’ve always made sure people understood is that the 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.” And at the Davos event, JPMorgan CEO Jamie Dimon remarked that such a cap would be an “economic disaster.”

Trump’s proposed cap also has stoked some division on Capitol Hill, embraced by the likes of Sen. Bernie Sanders and Democratic Rep. Alexandria Ocasio Cortez, yet termed a “bad idea” by others such as former Republican Sen. Pat Toomey, as detailed by CNN last week. The hurdles faced in Congress may be reflected in the fact that bank stocks are largely higher through the past several days, indicating that the market has shrugged off those concerns.

Trump repeatedly linked affordability to interest rate policy and his dissatisfaction with current Federal Reserve leadership. He said Americans should face far lower borrowing costs, arguing, “We should be paying the lowest interest rate of any country in the world.”

He criticized the pace of rate cuts and Federal Reserve Chair Jerome Powell, claiming rates remain unnecessarily high.

Energy prices featured prominently in Trump’s affordability narrative. He said lower fuel costs ripple through the economy, easing pressure on household budgets. Trump linked energy production to grocery prices and inflation more broadly, arguing that expanded domestic oil and gas output has helped reduce costs across the economy. Those lower prices, he said, complement easing inflation and support consumer spending power.

Homeownership and Housing Affordability

Housing emerged as a central theme in Trump’s affordability message. He described homeownership as a cornerstone of economic stability, saying, “Homeownership has always been a symbol of health and vigor of American society.” He argued that high interest rates pushed that goal out of reach for many households in recent years.

Trump also criticized institutional ownership of single-family homes, saying large investors have driven up prices. “Homes are built for people, not for corporations,” he said, adding that he has signed an executive order banning large institutional investors from buying single-family homes and is urging Congress to codify the ban.

At the same time, he said affordability efforts must balance the interests of current homeowners. Trump warned that overly aggressive price reductions could harm existing owners whose wealth is tied to housing values, saying he does not want to “hurt the value of people that own a house.”