The Fed's First Rate Hike Since 2023 Is Worth About $81 Million a Year to Interactive Brokers
A quarter-point move carries a price tag, and the company previously disclosed it.
Overview
The Federal Reserve raised its target range for the federal funds rate by a quarter point on Wednesday, Sept. 16, to 3.75% to 4%. The vote was unanimous, and the new range went into effect Thursday.
It is the central bank's first rate increase since July 2023. As late as December, the Fed was still cutting.
Details
Interactive Brokers (NASDAQ:IBKR) can attach a dollar figure to what that means. The automated global broker earns interest on its customers' idle cash and margin loans. And its latest quarterly filing lays out what a move like this is worth: A 0.25% rise in U.S. dollar interest rates adds about $81 million a year to net interest income, if maturing investments roll over at the new, higher rates.
Source
Originally published at www.fool.com.