Sen. Elizabeth Warren on a Credit Card Rate Cap and Affordability 1/14/26

0:00Bring in show music, please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. I don't believe in caps. I believe in free markets and capitalism. And I also believe in the independence of the Fed. And I don't care about the politics. The strange bedfellows partnership that sounds like the beginning of a late night comedy sketch. Yes, I was surprised. In fact, I did not recognize the phone number. Senator Elizabeth Warren may be working with President Trump to cap interest rates on credit cards, Stranger Things. He had not lifted a finger to try to get something through on credit card interest rate caps.

0:40And how to be happier in 2026? Arthur Brooks says, put away your phone. News has always been tough. We want to know what's going on in the world. The problem is that there are no boundaries to it. Plus, violence in Iran, Netflix's potential all-cash offer for Warner Brothers Discovery and the rest of today's news that got us squawking. Congress is going to have a heart attack. It's Wednesday, January 14th, 2026. Squawk Pod begins right now. Stand Becky by in three, two, one. Cuba, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square.

1:20I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. I want to talk about the banks. Remember, J.P. Morgan. The financials had a rough day yesterday. Yeah, and J.P. Morgan initially was up 5 % or something. It closed down 4%. The 10 % thing. The caps on credit cards. That was probably it. Inflation was pretty good numbers yesterday. I mean, it could have been a good day, but, you know, I looked at how our poor, not poor, but, you know, CNBC writes what happened yesterday, and I looked at them explaining what happened. They even mentioned Greenland, because there's a big meeting today.

1:56They mentioned Iran. I mean, if you want to find things. There's a lot to look at. There's a lot to look at. There's a lot to look for. But just on pure earnings, J.P. Morgan was pretty good. They did have a surprising decline in their investment banking. Not a decline, but lower than had been anticipated. On closer inspection? On closer inspection from some of those. And it did raise some questions about what you're going to see from Goldman Sachs. You can do it all again today with banks and PPI. The death toll, nobody knows, but it's rising in Iran as the government cracks down on protesters.

2:29A U.S.-based rights group said it had verified at this point about 2 ,600 deaths, including about 2 ,400 protesters and 150 government-affiliated individuals. The protests began last month over soaring inflation. morphed into a broader challenge, obviously, to the mullahs in Iran's establishment there, the theocracy, or thugocracy, people are calling it. On True Social yesterday, President Trump told Iranians to keep protesting and said help is on its way. He asked later in the day what he meant by that. The president told reporters that they would have to figure it out, I guess, just saying, wait, cover the Post today.

3:07They always can dig up something even, I don't know, more compelling for the cover of the Post, I guess. But according to an eyewitness that they have, if you want to get the body back from one of your loved ones, as much as a$5 ,000 bullet fee is what the Post goes. It's right on the cover of the Post. So not only are protesters being shot, but families are being forced to pay bullet fees of roughly$5 ,000 to get the body of their loved ones back, according to an eyewitness in Tehran who writes for the Post. Wow. Totally bizarre. Well, none of that, not one part of that is a good story at all.

3:54But then again, what do we do? I mean, is it when they said if they keep shooting, we're going to start shooting? Is that Congress going to have a heart attack? In the meantime, President Trump responding to comments from J.P. Morgan CEO Jamie Dimon, who said anything that chips away at Fed independence is a bad idea. Here's the president speaking with reporters yesterday. I think it's fine what I'm doing. We have a bad Fed person. He was extended by Biden. And yeah, I think he's wrong. I think it's wrong. He's done a bad job. We should have lower rates. Jamie Dimon probably wants higher rates.

4:33Maybe he makes more money that way. Dimon made his remarks after J.P. Morgan released fourth quarter earnings. He was commenting on the Justice Department's criminal investigation of Fed Chair Jay Powell related to a multibillion-dollar Fed renovation project. And by the way, those comments were relatively tame. If you read what he said, he basically said, anything that chips away at the central bank's independence is not a good idea. In my view, it will have the reverse consequences. It will raise inflation expectations and probably increase rates over time. But, of course, anything Jamie Dimon says gets outsized attention by anybody who covers the banks, who covers Wall Street, who covers business in general.

5:13The Financial Times is reporting that Powell provided senators with details about that project last summer that could undermine the Trump administration's claims that Powell misled Congress. In the meantime, The Wall Street Journal says that the Fed received grand jury subpoenas one day after President Trump criticized U.S. attorneys at a White House event telling them that they were weak and weren't moving fast enough against his perceived targets. Meantime, President Trump also defending his proposal to cap credit card interest rates at 10 percent for a year. He's telling reporters that he wants to protect people from being charged high rates by, in his words, Jamie Dimon or anyone else.

5:51You can see how this sort of war of words can escalate. And we're going to be speaking. I don't even know that Jamie's was it was a war of words. No, no, no. But when I done this stuff, I don't know what what happens. No, I know. But what happens invariably is you're a jerk. He's he. Jamie's asked to comment on it. So he does. Which, by the way, is the right thing to do. Right. I would argue. Yeah. And then invariably a reporter who's also looking for a quote. Right. And they see President Trump says Jamie says the opposite of what you're doing. What do you think? And then, of course, he does.

6:24The president says it, but it says it in a much harsher and... He always hits back harder than tone. It's a very unique moment where you have all of the different sides coming together and I imagine also splitting apart. You've got to be conflicted on this. I'm totally conflicted on this. I'm not at all. I'm not at all. You don't think it's the right thing, right? I'm not at all because I have a spine. because I don't believe in caps and I believe in free markets and capitalism and I also believe in the independence of the Fed and I don't care about the politics. And I think that everybody should be able to do that.

7:04You're perfectly intelligent. But to have Elizabeth Warren and President Trump talking on the phone and she says we could get something passed legislatively if you were behind this and cap these things permanently, that is a surreal world that we are living in. Maybe you're not conflicted, but the reason I'm conflicted is because... What are you conflicted? I'm conflicted that Trump and Elizabeth Warren are on the same side of something. I bet they're on the same side of about three or four or five things. I bet they're on the same side of about three or four or five things. And any of those things I probably would...

7:45It's not enemy of my name, but I disagree with most of the things that Senator Warren proposes. Or that anyone on the far left proposes anything trending towards. What's been so interesting about President Trump. Right. There's more and more. Those things are. But then tell me why a classic conservative is not out publicly deriding this. I think they are. I am. I don't think that that's a good idea. I'll tell you a lot of things. Even if you're not a fan of Jay Powell because they waited too long to raise rates and maybe that had something to do with inflation. And this is like the last thing that the Trump administration really wants as we go towards the midterms is something that doesn't just highlight the GDP numbers and the inflation numbers coming down.

8:34It's a total distraction from being able to sell or at least promote the good things that are happening. It backfires because it brings everybody out to defend Jay Powell and the Fed as the institution. A lot of people that are on the side of the president, you can read that. That's what they said. It's like you don't need this right now. This this I think that's what Scott Besson was saying. He got all these good things to talk about. And because of what's happening with. But Trump still says he doesn't. He didn't know. Well, he doubled down there yesterday. He said that jerk at one point referring to Jay Powell comments that he made yesterday in front of reporters.

9:07So he's not. And then there are there are real dead enders that are saying, look, no one's above the law. and it's way over, and Luna is right, the congresswoman that referred the stuff to the Justice Department. Supposedly that's where it came from. That's what Bill Pulte said. It wasn't me, it was her. President Trump says it wasn't me, it was her. But these are all his people who are doing this. And Pam Bondi, and that was what was great about that journal piece yesterday, that people are scrambling to try and get to curry favor and doing things that they think he wants. Toadies, I think is what they did.

9:45They did call them toadies. A toady is something you don't want to be called. I think I've been called a toady before. Netflix is reportedly considering an all-cash bid for the streaming and studio assets of Warner Brothers Discovery. Reports say a cash offer could be a faster way to close a deal. Warner Brothers Discovery is facing a competing bid from Paramount Skydance and its CEO, David Ellison. He wants to buy all of Warner Brothers, including the company's cable TV channels. Paramount sued Warner Brothers on Monday for information about its deal with Netflix and said it plans to nominate directors to Warner's board.

10:21And something that you rarely see, I was like, you know, it's in the journal. Did you guys see this? The big story on Netflix is on B1. That's the big story. So I got to the bottom of it, and I'm like, where is it? That's it. Short on details? Three paragraphs. Oh, you know what? It came in late. It happens late, and you're just snacking in there. You're old school. Well, you're still reading the print edition. There's a longer version online. Online. Online. On the computer. Yeah, that just means it happens so late. It's on your phone. I pay a subscription, but now I'm not sure of what my password.

10:53It's hard. Anyway, Netflix at 70... It doesn't make any sense for them to do anything right now. If Netflix is$72 billion, and if you value Paramount at$77.9 billion, you really got to question, you got to use what the Warner Brothers strategy is and question whether that's money good. But if they went to 72 cash, that would definitely be money good at 70 because the collar on the stock. But if you're Netflix right now, it's the incentive to do anything. No incentive to be bidding against yourself. You should just leave it. Stay where you are until you actually see how this plays out. You think Netflix is going to make a move before Paramount makes a move?

11:34It looks like they will in terms of all cash, don't you think? I don't know. I think you'd wait for the Ellisons first. And that could be any day with them, too. Don't you think? If you believe they're going to come. And then the question is, how are they going to guarantee it? And I think there's going to be an issue again. No matter what Larry Ellison says, you'll still say, we don't believe you. Probably. Not necessarily. If he guarantees the whole thing. How many different things are cobbled together to get to that? How many banks are involved? The debt payments are a big deal. So it's very hard to make it work unless the Ellison family genuinely says, this is all on us and it's all locked up.

12:15In the meantime, you're going to hear a lot of back and forth. Cheese will be next. Coming up on Squawk Pod, Senator Elizabeth Warren, noted progressive and ranking member of the powerful Senate Banking Committee, on the potential to put a cap on credit card interest rates. Is there anybody defending 36 percent interest rate on credit cards or 28 percent interest on credit cards? And her unlikely ally in the fight. You know, it really was one of those moments. I don't usually pick up the phone when I don't recognize the number.

12:52You're listening to Squawk Pod. Here's Becky Quick. All right. Welcome back, everybody. President Trump reached out to Democratic Senator Elizabeth Warren for a conversation that the White House called productive. Joining us right now with the details of how that conversation came about and maybe some areas where they can work together is Senator Elizabeth Warren. She is the lead Democrat on the Banking Committee. And, Senator, thank you for being with us. It almost sounds like a Saturday Night Live skit that the two of you actually spoke and had something that the White House called productive.

13:24First of all, how did this conversation come about? It was after a speech that you had given that was actually pretty fiery. That's right. I had just given a speech about the future of the Democratic Party. And the basic point that I made in the speech is that Donald Trump had promised for an entire year in the run up to the 2024 election that on day one, he would lower costs for American families. He gets elected. And the very first interview, he says on day one that he will lower costs for American families and that that's why he got elected. And yet here we are a year in and the cost of groceries is up.

14:02The cost of utilities is up. The cost of housing is up. The cost of health care is up, up, up. And all of those costs are up because of policies that Donald Trump and the Republicans in Congress have pushed on our economy. So the argument I was making in the speech is it's time for Democrats to jump in to hold Donald Trump and the Republicans accountable for these higher costs for American families and then make a choice as we go forward. We can take our economic agenda and sand it down, narrow it down to make it more acceptable to billionaire donors. Or we can actually go full throated on behalf of the American people and make bold proposals and demonstrate that we will get in there and fight for them.

14:57But this was all about lowering costs for American families because that's what Democrats are going to do. And that's what the election of 2026 is going to be about. So shortly afterwards, you get a call from the president. Were you surprised what happened? Yes, I was surprised. In fact, I did not recognize the phone number. And so the question then is, he raises the point about a cap on credit card interest rates, something that had come up in the speech and that I've been working on for years. and that is trying to get interest rates down. And he said he wanted to work on that. And I said, great, let's get something done.

15:41Because my point was, and I had made this point in the speech, he had not lifted a finger to try to get something through on credit card interest rate caps. And then while I had him, I said, you know, there's something else you could do just right away. We need to bring down the cost of housing. And the way we do that is to increase housing supply all across this country. We're three million units of housing short, and we need urban housing, rural housing, housing for first-time homebuyers, housing for renters, housing for seniors, housing for people with disabilities. So I had worked with Chairman Tim Scott, the Republican chair of the Banking Committee.

16:26We put together a bill that had 40 proposals in it. Every one of them aimed toward increasing supply, making it easier to get approvals, more on manufactured housing. Passed the Senate unanimously, unanimously, and yet goes over to the House and the House Republicans won't move it at all. Gets tangled up over there. And I said, Mr. President, you want to help bring down the cost of housing? Light a fire under your House Republicans. Get them to move this bill. Let's get it signed into law. And let's get started now on a first step on lowering housing costs. So we have a lot to talk about. I want to go back to credit cards just for a moment.

17:16because there is a study by a professor at the University of Pennsylvania's Warden School suggesting that a 10 % cap could make up to 80 % of customers of credit cards in America unprofitable at the current lending rates and credit limits, which suggests that there would be a meaningful reduction in the amount of credit potentially made available to customers if something like this were to go into effect. What do you make of that? Well, first, obviously, I want to take a look at their data, but I also just want to start with the big picture here. Is there anybody defending 36 percent interest rate on credit cards or 28 percent interest on credit cards?

18:01Anybody out there who isn't paid by the industry that's putting out those credit cards? And do keep in mind right now, There are a lot of community banks. There are a lot of credit unions that are putting out credit cards at much, much lower interest rates. But what do the credit card company giant say? They say, oh, no, you can't touch credit card interest rates. No matter what, it will be the end of the world. We will shut down credit cards. They go on and on and on. And basically, it's the same song they sang over what would happen if the CFPB put some caps on overdraft fees. What would happen if the CFPB put caps on fees on credit cards?

18:51The credit card companies literally make billions of dollars. Last year, they made$150 billion in profits off the credit cards that American families are holding. So we have some choices to make. Do the investors and the corporate executives keep that$150 billion? Or does some chunk of that go back to hardworking families who are just trying to pay their mortgage, just trying to pay for groceries every month? Senator, cumulatively, prices rose 22 percent in the Biden administration, so much, in fact, that real average wages were lower when Biden left the office than when he came in. Inflation was today 2.7 percent.

19:43It's still too high, obviously. But how are you blaming Trump's policies on the affordability crisis when you're talking about 2.7 percent versus 22 percent? Well, let's let's talk about what's happened. And that is that Trump's tariffs have driven up prices. Trump's chaos from the tariffs and other changes have driven up prices. Trump's energy policies have driven up prices. Price of utilities, take a look around. And Trump's decisions, along with the Republican Party, to cut access to health care has driven up the cost of health care for some families double and even triple. So we're talking about Trump policies, Trump policies that have driven up costs for American families.

20:39You know, just pick one little piece out of that. Have you observed what's happening to home mortgage foreclosures? Do you know that since Donald Trump was sworn in, home mortgage foreclosures have gone up 21 percent? So, yeah, there have been a lot of policies that Donald Trump and the Republicans have been following for a year now. And it is showing up in the cost that people pay. I was trying to do the I was trying to do the composite of putting everything together instead of picking individual things. And that's two point seven percent versus a high of nine percent during the Biden. So oil's oil's down, at least most prices don't drop, Senator.

21:20You know, the Fed looks for a two percent inflation rate. That's the target. So prices continue to rise every single year because we don't want deflation. So 2.7, while not great, is nothing close to what we had under the Democratic administration. You know, Joe, what you should do, you should go lecture to every American family around the country who is saying they feel under enormous economic stress. Eighty percent of Americans say I'm worrying about whether or not I can make it to the end of the month on my paycheck. I'm worried about whether or not I can send my kids to school. I'm worried about whether or not I will ever have a chance to retire.

22:03American families are mashed to the wall on prices. They are not able to take their paychecks and stretch them far enough and build some real economic security. And part of that is because Donald Trump, in the one year that he has been in office, after promising how many times during the election? At least hundreds of times promising to lower costs on day one. The costs that families have to deal with up close and personal every day. Those costs, groceries, utilities, housing, health care, those costs are up. and it's putting a squeeze on American families. You can go tell them it's not, but I don't think they're going to believe you.

22:51I'm trying to read the room here. Do you get the sense that you and President Trump will actually be working on things together or do you think that this was just talk and that no action will come of it? I don't know. You'd have to ask Donald Trump. I'm ready to go. I've got the legislation ready to go. We've got the housing bill that we've already gotten all the way through the Senate. I've worked with every Republican to get that done. My job is to do anything I can to lower costs for American families. And the Democratic Party is ready to go. We stand behind that. The question is, right now, all the Republicans have done is raise costs for American families.

23:33Donald Trump says, no, he wants to be in the business of lowering those costs. My answer is, talk is cheap. But if he's really ready to put up and get something done, then let's do it. Did you said you didn't recognize the phone number when it came in? Did you save the number into your contacts? You know, it really was one of those moments. I don't usually pick up the phone when I don't recognize the number. And I thought, I just come out of giving this speech. And I thought, yeah, 202. You can put a special ringtone on there, Senator. I've seen it on Landman. What his wife calls on Landman. It's just really scary.

24:12I think you can shop. It's a great touch. Senator Warren, thank you for joining us this morning. Thank you for having me. Coming up on Squawk Pod, be happier with less technology and less envy. It just seems kind of obvious and maybe I don't need Arthur Brooks to tell me this. You need Arthur Brooks. Okay, I do need you to tell me this. Happiness guru Arthur Brooks' New Year's resolutions are next.

24:43Welcome back. This is Squawk Pod. Up in Andrew, Q. You're watching Squawk Box right here on CNBC. I'm Andrew Osorkin along with Joe Kernan and Becky Quick this morning. We've got a lot going on. Arthur's here to weigh in on a busy start for 2026. Let's bring in Harvard professor Arthur Brooks. He's so much more than that. I didn't mean to start out disparaging you. His new column for the free press is titled, The Problem with Your New Year Resolution. And Arthur is, thank you. Thank you for joining us. Welcome. Love to see you. Uphill, uphill battle. You've been swimming upstream ever since. I don't know why someone would decide to try to help people with happiness in the current world.

25:27And what I mean by that is I think of 100 years ago, and I wonder if you went out in the fields for 10 hours after getting up early and put in a day where the dignity of work and physical labor and the endorphins go. You come home and it's warm and there's some hot food on the stove and you get a good night's sleep. Is that possible anymore in the modern world? Because we don't have any problem. We're not worried about most of us, hopefully, aren't worried about staying warm. We're not worried about sustenance and things like that. And yet we're miserable. Yeah. Well, you bring up a really good point, which is that your great granddad Kernan didn't come home and say to his wife, honey, I had a panic attack behind the mule today.

26:14And that's the reason was because effectively his brain was working the way it was supposed to work. And we actually have to take a lesson from people in the past. Now, I don't want to go back in time, but the truth of the matter is that we need to live in all sorts of ways where we're concentrating on our work and love. And that's one of the reasons that you find that the habits of the happiest people are their faith or philosophical life, their family life, their friendships, their deep friendships. I mean, real friends, not deal friends, and certainly not virtual friends. And then the work that you're needed for.

26:44And so that's the things that we need to be focusing on today. One of your themes throughout, I think, all of your books is the dignity of work. I was going to say it just seems kind of obvious, and maybe I don't need Arthur Brooks to tell me this. You need Arthur Brooks. Okay, I do need you to tell me this. You're reading my column in the free press on this, right? New column in the free press, folks. But if all I did was read newspapers, or even as Andrew does, read the newspapers online, like this newfangled thing that people do. That's newfangled? No, kidding. But if I were to do— I don't like his newfangled to him.