Under Chair Kevin Warsh, the FOMC raised its benchmark rate by a quarter point to 3.75%-4%. September projections show most policymakers expect no cuts until at least 2028. The analysis says Visa and Wells Fargo may hold up if rates stay high.
Markets expected at least one more rate hike this year, possibly two, according to CME Group's FedWatch tool. Visa does not extend the credit on its cards; it routes transactions and earns percentage-based fees, which can rise as prices increase, though a recession could cut volume. In fiscal Q3 2026, ended June 30, its payment volume and processed transactions each increased 10% year over year, and net revenue rose 14%. CFO Chris Suh said management expects low-double-digit revenue growth if consumer spending remains stable.
At Wells Fargo, net interest income—the difference between interest earned on loans and bonds and paid on deposits and other funding—accounted for more than 54% of second-quarter revenue. Management reaffirmed a full-year outlook of about $50 billion, versus nearly $47.5 billion in 2025. The yield curve has flattened but remains technically steep, and deposit costs are likely to rise. Nonperforming assets have trended down over the past year, though an inverted yield curve could add pressure on banks over time.
