By Leena Oberoi
Growboo
America’s largest banks trimmed their prime lending rates on Wednesday after the Federal Reserve delivered its first rate cut of the year, easing borrowing costs for households and businesses.
JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America lowered their prime rate from 7.50% to 7.25%, following the Fed’s decision to reduce its benchmark rate by 25 basis points—the first cut since December.
The prime rate, typically offered to the most creditworthy corporate borrowers, also acts as a benchmark for consumer loans such as mortgages, credit cards, and small-business financing. The Fed’s move underscores growing concern over economic weakness and a softening labor market, despite inflation remaining above target and uncertainty surrounding the impact of President Donald Trump’s tariffs.
“Jobless claims have now reached their highest levels in nearly four years, highlighting a labor market that is weaker than expected,” said Richard Flynn, managing director at Charles Schwab UK. Businesses wary of trade policy shifts have slowed hiring, further fueling worries of stalled job growth.
Lower borrowing costs could help reverse some of that weakness. Cheaper credit may unlock new loans for small businesses, while well-capitalized firms could restart hiring, supporting consumer demand. For banks, an uptick in lending also means growth in interest-earning assets.
Still, Wall Street leaders caution that risks remain. JPMorgan CEO Jamie Dimon recently warned that the full economic effects of tariffs, fiscal policy, and geopolitical strains are still unfolding. Goldman Sachs chief David Solomon shared similar concerns, noting that “there’s no question” trade tensions are weighing on growth.
