Are Rate Cuts a Bigger Risk or Reward for Affirm?
President Donald Trump is still pushing the Federal Reserve for rate cuts, which would be better than a rate increase for Affirm.
Overview
U.S. President Donald Trump hasn't been shy about what he'd like to see happen with interest rates, openly calling for the Federal Reserve to cut rates. That doesn't seem to be in the cards, given recent comments from Fed chair Kevin Warsh. But Affirm (NASDAQ: AFRM) shareholders shouldn't ignore the political and economic dynamics taking shape. The fintech company likely has a big preference for the direction of rates.
Affirm is a buy-now-pay-later company, but it also has a card business and makes consumer loans. That gives it three potential sources of revenue: payments from retailers for offering zero-interest financing, transaction fees from card usage, and interest from loans. However, the underlying story here is consumer health. Affirm needs people to buy things for its model to work.
Image source: Getty Images.
Details
Source
Originally published at www.fool.com.