--- title: "If Kevin Warsh Keeps Rates Elevated, These 2 Stocks Are Built to Handle It" type: "News" locale: "en" url: "https://longbridge.com/en/news/300022025.md" description: "The Federal Reserve raised rates to 3.75%-4%, with expectations of further hikes and no cuts until 2028. Visa is highlighted as resilient due to transaction volume growth and inflation hedging, while Wells Fargo benefits from rising net interest income despite yield curve flattening. Both stocks are positioned to handle an elevated-rate environment." datetime: "2026-09-24T11:25:19.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/300022025.md) - [en](https://longbridge.com/en/news/300022025.md) - [zh-HK](https://longbridge.com/zh-HK/news/300022025.md) generator: "portal-rs" --- # If Kevin Warsh Keeps Rates Elevated, These 2 Stocks Are Built to Handle It After much anticipation, Federal Reserve Chairman Kevin Warsh and the Federal Open Market Committee (FOMC) raised the benchmark overnight federal funds rate by a quarter point, bringing the target range to 3.75% to 4%. It was the first time in three years that the FOMC raised rates. The vote was unanimous. The future remains murky, but the market currently expects at least one more rate hike this year and potentially two, according to **CME Group**'s FedWatch tool. Furthermore, the FOMC's recent dot plot from its September meeting, which shows each member's expectations for where the federal funds rate will be in the future, indicates that most members of the committee don't expect rate cuts until at least 2028. If this scenario plays out, here are two stocks built to handle it. ![Fed Chair Kevin Warsh.](https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84ODc5ODQvd2Fyc2gtb2ZmaWNpYWwtd2hpdGUtaG91c2UtcGhvdG8tYnktZGFuaWVsLXRvcm9rLmpwZyZ3PTM4NDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Fed chairman Kevin Warsh. Image source: The White House. ## Visa **Visa** (V -0.14%), the largest payments network in the world, should prove resilient in an elevated-rate environment. People will see the Visa logo on debit and credit cards, but it is not actually extending any credit. Rather, the company helps route transactions between various parties and takes a small fee as a percentage of each transaction, essentially collecting a toll on an electronic highway. Rising interest rates are coinciding with stubborn inflation, making everything more expensive. Still, the economy, by many benchmarks, is still performing well. This is good for Visa because when economic activity is robust, there is more spending through its network, leading to more fee income. And when goods and services get more expensive, because Visa charges a fixed rate, its fees should rise as well, making it a strong hedge against inflation. Expand ![Visa Stock Quote](https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1YucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) ## NYSE: V Visa Premium Feature Moneyball Superscore 87/100 Today's Change (-0.14%) $-0.52 Current Price $361.52 ### Key Data Points Market Cap $675BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary. Day's Range $360.00 - $366.33 52wk Range $293.89 - $385.57 Volume 2.3K Avg Vol 7.4M Gross Margin 77.16% Dividend Yield 0.74% In its third quarter of fiscal 2026 (ended June 30), payments volume and processed transactions rose 10% year over year, while net revenue jumped 14%. On the company's earnings call, Chief Financial Officer Chris Suh told analysts that management expects net revenue growth to be in the low-double-digit percentage range: "For drivers, we are assuming that the broader consumer spend stability continues from a macro perspective. Our overall drivers remain resilient and strong." If the economy slows down or tips into a recession, that could hurt transaction volume, so it bears monitoring, but that's not the outlook right now. ## Wells Fargo Many investors will assume that rising interest rates are not good for banks. But that's not always the case. Rising rates can create a beneficial environment for bank stocks, but it's a balancing act. Typically, banks benefit from rising interest rates when the yield curve is steep, meaning bonds with shorter maturities yield less than longer-dated ones. That's because banks typically borrow money at short-term rates and lend it out at longer-term rates. However, rising rates can also increase deposit costs and lead to customer credit stress. The yield curve has been flattening of late, with the spread between the yields on the two- and 10-year U.S. Treasury notes still technically steep but much less so than before. ![10 Year Treasury Rate Chart](https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/9b0068bd306ab66bc7121c7e206111ac.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) 10-Year Treasury Rate data by YCharts. Still, net interest income (NII) -- which is essentially the spread revenue that banks make between what they pay on deposits and other funding sources and the interest they earn on loans and bonds -- has largely moved higher during the past year. NII made up more than 54% of total revenue at Wells Fargo in the second quarter. During the second quarter, management reaffirmed its outlook for full-year NII to be roughly $50 billion, up from nearly $47.5 billion in 2025. Expand ![Wells Fargo Stock Quote](https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1dGQy5wbmcmdz0xMjg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) ## NYSE: WFC Wells Fargo Premium Feature Moneyball Superscore 54/100 Today's Change (-1.50%) $-1.25 Current Price $81.90 ### Key Data Points Market Cap $248BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary. Day's Range $81.81 - $83.39 52wk Range $72.78 - $97.76 Volume 1.5K Avg Vol 14.3M Dividend Yield 2.26% Overall, credit at the bank still looks quite benign, with total nonperforming assets trending down during the past year. Deposit costs are likely to continue to creep up, but I still expect earnings and revenue to perform well unless the yield curve were to invert, which could add more pressure on banks, but over time. ### Related Stocks - [WFC.US](https://longbridge.com/en/quote/WFC.US.md) - [V.US](https://longbridge.com/en/quote/V.US.md) - [CME.US](https://longbridge.com/en/quote/CME.US.md) - [WFC-D.US](https://longbridge.com/en/quote/WFC-D.US.md) - [WFC-L.US](https://longbridge.com/en/quote/WFC-L.US.md) - [WFC-Y.US](https://longbridge.com/en/quote/WFC-Y.US.md) - [WFC-C.US](https://longbridge.com/en/quote/WFC-C.US.md) - [WFC-Z.US](https://longbridge.com/en/quote/WFC-Z.US.md) - [WFC-A.US](https://longbridge.com/en/quote/WFC-A.US.md) ## Related News & Research - [Visa (V) Just Gave Investors Something To Think About](https://longbridge.com/en/news/304838789.md) - [Did Job Cuts Just Shift Wells Fargo's (WFC) Investment Narrative?](https://longbridge.com/en/news/304697146.md) - [Visa Inc. $V Stock: Focused Wealth Management Inc Decreases Stake](https://longbridge.com/en/news/304414409.md) - [Visa Releases First-of-Its-Kind Industry Benchmark for AI Shopping; Almost Half of Test Runs Fail | V Stock News](https://longbridge.com/en/news/304481113.md) - [2,371 Visa Inc. $V Shares Sold by Virtue Capital Management LLC](https://longbridge.com/en/news/304098134.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**