Citigroup CEO Jane Fraser told CNBC on Tuesday that recent volatility—marked by a steep drop in U.S. equities, a weaker dollar and rising Treasury yields—reflects short-term reactions to geopolitical headlines rather than sustainable investor behavior. She noted that while gold and silver prices surged on the sell-off, she “doesn’t see where else you go” but U.S. assets over the medium term. Fraser pointed out that consumer spending during the holiday season grew at a 5.3% annualized rate and that corporate earnings forecasts for the first quarter remain 4% above consensus, underlining her view that momentum will shift back to American equities and fixed income once headline risks subside.

Fraser emphasized that U.S. companies have honed their ability to navigate trade disruptions, citing the resolution of three major supply-chain bottlenecks in semiconductors, automotive components and agricultural exports since mid-2023. She highlighted robust holiday retail sales—up 6.8% year-over-year—and forecast a further boost to consumer purchases this spring due to recent tax-code changes lowering the top marginal rate by 1.8 percentage points. She also pointed to $120 billion of planned corporate investment in AI and infrastructure projects, arguing these commitments will support revenue growth even if geopolitical tensions persist.

On the topic of consumer credit, Fraser warned that a proposed 10% cap on credit-card interest rates would backfire by restricting access to credit for lower-income households. She noted that Citigroup and other major banks already market “low-cost, no-frill” card products with average APRs below 14%, and argued that capping rates would force issuers to exit less profitable segments, cutting off credit to an estimated 18 million subprime borrowers. Fraser estimated that sectors reliant on card spending—hotels, restaurants, airlines and retail—could see a combined $8 billion decline in annual revenues if consumers lose access to revolving credit.