Hot US CPI Hits Lenders as Coinbase Gets OCC Trust Charter

what happened

According to Stocktwits, shares of fintech lenders fell last week, giving back earlier gains. The drop followed October consumer prices that beat economists' forecasts for a third straight month, along with hawkish remarks from Fed officials.

Fed Governor Christopher Waller backed a possible half-point rate increase if inflation momentum persists, and Dallas Fed President Lorie Logan and Chicago Fed President Austan Goolsbee voiced similar views. Stocktwits said these comments cemented expectations for a December hike. SoFi Technologies and Affirm Holdings both ended their second week lower, while Fiserv rose for a sixth consecutive week.

On November 9, Coinbase received final unconditional approval from the Office of the Comptroller of the Currency to launch Coinbase National Trust Company, which will bring its institutional digital asset custody under direct federal oversight.

why it matters

Expectations of tighter Fed policy typically weigh on companies whose earnings and margins are sensitive to borrowing costs, so SoFi and Affirm have tracked inflation data closely. The OCC approval for Coinbase concerns its institutional custody business and does little to change the broader rate outlook.

market impact

US fintech lenders: expected rate hike weighs on SoFi and Affirm

• ▼SoFi Technologies pressure down — expected Fed rate hikes weaken the outlook for lending companies
• ▼Affirm Holdings pressure down — rate sensitivity and hawkish Fed rhetoric pressure the shares

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