Transcript
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Alex Osola (0:33)
A flurry of bank earnings this week shows American consumers are still spending and borrowing. Plus, US home sales finished 2025 on a surprisingly strong note. Can it continue?
Nicole Friedman (0:44)
Definitely. We could see a continuation of this increased activity, but if rates fall and that brings more buyers into the market, maybe that just pushes prices up faster and kind of offsets any of that affordability improvement.
Alex Osola (1:00)
Speaking of housing, polymarket now lets Americans bet on whether home prices will go up or down. It's Wednesday, January 14th. I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's the top headlines and business stories that move the world today. Earnings out this week from some of America's biggest banks show that consumers continue to spend and borrow at a healthy clip at the end of last year despite economic uncertainty, JPMorgan Chase reported yesterday. And today we had bank of America, Citigroup and Wells Fargo. Collectively, the four banks posted 28 and a half billion dollars in profit for the fourth quarter, with profits for the full year up nearly 5% from 2024. JP Morgan, bank of America and Citigroup say spending on cards rose in the fourth quarter while delinquencies on credit cards edged lower. And yet stocks of these banks fell today, as did tech stocks weighing on the major U.S. indexes. The Nasdaq led the losses, falling 1%. As part of his attempt to address concerns around affordability, President Trump has called for a 10% cap on credit card interest rates for one year. There's no guarantee this would go into effect, but if it did, one impact it would have would be shaking up the world of credit card rewards. WSJ personal finance reporter Imani Moiz tells us what could be in store for cardholders.
Imani Moiz (2:21)
What it means is that it would be harder to get credit card rewards unless you are at the very tippy top of the credit spectrum. So people with high credit scores, people who make a lot of money and therefore spend a lot of money, you shouldn't expect too big changes because those types of rewards are funded mostly through interchange, which are those swipe fees that merchants pay to accept credit cards and also those sky high annual fees that we've also talked on this show about that can be as much as $900 a year. But what you will see is that the more basic rewards, so think about things like simple cash back or maybe just a more entry level rewards card, those will probably get cut. So there was a recent Vanderbilt study that gamed this out a little bit and they found that in order to basically offset the hit to bank profits from this reduction in rates, they would need to basically eliminate rewards for anyone with a credit score below a 760.