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FEBRUARY 4, 2025 |
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Instant gratification: Large financial institutions (FIs) are how many times more likely to be connected to instant payment rails than smaller institutions? |
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A) 3 B) 4 C) 5 D) 6 |
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MORTGAGE RATES |
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The Federal Reserve has paused rate cuts for now—meaning it likely won’t lower them again until May, per CBS News. While the Fed’s rate doesn’t directly control mortgage rates, consumers expected mortgage rates to become more affordable after the flurry of rate cuts last year, per Fortune. |
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These two rates have historically tended to move in unison, despite their indirect link. But mortgage rates are more closely tied to the 10-year Treasury bond yields than to the Federal Reserve’s short-term rate. Recent rises in these yields, driven by strong economic indicators and inflation concerns, caused the rates to diverge. |
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And uncertainty surrounding economic policies, such as President Trump’s proposed tariffs, has led to investors demanding higher returns on long-term investments, further fueling mortgage rates’ rise above 7%. |
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CREDIT CARDS |
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Visa’s total payments volume increased 9% YoY in Q1 2025 (ending December 31, 2024), a slight acceleration from 8% YoY growth the year prior, per its earnings release. |
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Debit card volume grew 10% YoY, while credit volume grew 8% YoY.
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International volume increased 11% YoY, versus 7% in the US. |
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Strong payment growth helped boost the network’s overall revenues. Visa’s net revenues increased 10% YoY in Q1 2025. |
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INVESTMENT BANKING |
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HSBC is shutting down key parts of its investment banking operations in the UK, US, and Europe as part of CEO Georges Elhedery’s broader restructuring plan, per The Financial Times. The exact timeline for the closure of these units has not been specified, but the process is expected to unfold over the coming months. |
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Global investment banking accounted for just 6.2% of HSBC’s net income in H1 2024, per CNBC—illustrating the relatively small size of the business impacted. Still, banks with M&A and ECM capabilities should strategically target HSBC’s former clients. |
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REPORT |
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Real-time payments allow individuals and businesses to send and receive payments between bank accounts simultaneously. The benefits of real-time payments are centered around speed, convenience, and financial management. |
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CHART OF THE WEEK |
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Key stat: Despite slowing growth, worldwide remittance inflow will reach $929.18 billion by 2026, per our November 2024 forecast. | | | |
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