Major US banks gear up for bond sales as Trump turns up pressure

[NEW YORK] Wall Street is about to embark on its regular borrowing binge, as it gears up to sell debt soon after posting results. This year there’s a wildcard: US President Donald Trump, who is increasingly willing to pressure the firms.

Dealers are forecasting a busy week for high-grade issuance overall with US$60 billion of sales led by the six largest US lenders. About US$35 billion of sales this month will come from the Big Six, Barclays estimated in December, with that figure likely climbing to US$55 billion by the end of the quarter.

Meanwhile, the latest demands from the White House for credit-card lenders to limit their interest rates could weigh on bond issuance. President Donald Trump has called for lenders to cap rates at 10 per cent for one year, putting pressure on shares of US card issuers on Monday (Jan 12).

But the likelihood of the cap being made effective is still uncertain, points out Bloomberg Intelligence credit analyst Arnold Kakuda. It’s unclear how much impact, if any, this will have on earnings. Other potential rule changes, such as the US implementation of global capital rules, are also still in flux.

Meanwhile, borrowing is relatively cheap for banks. Investment-grade spreads have averaged 0.78 percentage point, or 78 basis points, this year and have not exceeded 85 basis points since June.

“With spreads and all-in yield levels, the lion’s share of the Big Six should issue in benchmark size subsequent to earnings,” said Robert Smalley, managing director at MacKay Shields.

The biggest US banks usually borrow in the investment-grade bond market soon after posting earnings, to make the most of positive investor sentiment after their results. The six banking giants are anticipated to have raked in US$157 billion in 2025, their second-highest annual profit ever.

For 2026, Barclays expects about US$188 billion of high-grade bond sales from the Big Six across all currencies – a 7 per cent rise year-over-year, likely to be driven by 20 per cent more maturities and redemptions.

JPMorgan Chase will be the first to report quarterly earnings on Tuesday, followed by Bank of America, Citigroup and Wells Fargo on Wednesday, and Goldman Sachs and Morgan Stanley on Thursday.

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“For the year, we expect the demand for bank credit, given economic activity and a more robust M&A environment, to counterbalance any perceived reduction in supply given regulatory changes,” said Smalley. BLOOMBERG