Trump-Powell Feud Keeps Credit Card Rates Sky-High, Straining Household Budgets

Rising tensions between President Trump and Fed Chair Jerome Powell could keep credit-card rates stubbornly high, further straining household budgets. As of July 2025, the Federal Reserve's benchmark rate stands at 4.25%–4.50%, and Powell shows no sign of cutting despite Trump's demands.

• Americans now carry $1.18 trillion in credit-card debt, and elevated Fed rates translate into steeper APRs and larger minimum payments.

• Financial experts warn that without a rate cut, middle- and lower-income families will see savings erode and spending power decline.

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Delinquencies on credit-card and auto loans among Americans earning $150,000 or more have jumped almost 20 percent over the past two years, according to VantageScore data. A Federal Reserve Bank of St. Louis study found late payments in high-income ZIP codes rose twice as much in the last year as in lower-income areas, driven by a cooling labor market and high borrowing costs.

In Brooksville, Florida, Christopher and his wife are tackling $50,000 in debt after job losses shrank their household income by $40,000. As upper-income spending softens—especially on big-ticket items—economists warn the economy may be more vulnerable to shocks without credit buffers.