Three financial stocks are positioned to thrive even if the Federal Reserve raises rates again, according to Motley Fool. The firms, JPMorgan Chase, American Express, and Progressive, have strong business models that can endure rising interest rates.
What happened
The Federal Reserve’s ongoing battle against inflation could result in further interest rate hikes, impacting the broader economy. According to a report, while some financial institutions may struggle with increased rates, JPMorgan Chase, American Express, and Progressive are expected to perform well even in a challenging environment. The report noted, “Higher rates boost Progressive’s income from the float it holds.”
JPMorgan Chase benefits from higher rates due to its significant control over deposit interest payments. At the end of the first quarter of 2026, its consumer and banking segment held nearly $1.1 trillion in deposits. This structure allows JPMorgan to increase its income from loans without significantly raising the interest it offers depositors. “Higher rates could be supportive of JPMorgan’s business,” the report added.
American Express, which issues credit cards mainly to high-net-worth customers, also stands to gain. High spending resilience from these customers can buffer American Express against slow economic growth. The firm’s model generates consistent fee income that is less dependent on interest rate fluctuations.
Why it matters
Financial companies are significantly influenced by interest rate changes enacted by the Federal Reserve, which are designed to slow economic growth. While higher rates can adversely affect some sectors, the resilience of firms like JPMorgan, American Express, and Progressive illustrates that not all financial stocks are negatively impacted. Understanding which companies can weather financial storms is crucial for investors looking to navigate these turbulent waters.
Background
On May 10, 2026, the Federal Reserve flagged rising inflation as a concern, prompting discussions around potential interest rate hikes. In the wake of increasing energy prices driven by geopolitical conflicts, the economic outlook appeared uncertain. This environment underscored the necessity for financial companies to adapt to potential shifts in consumer behaviors and spending patterns.[1]
On May 20, 2026, the Fed conducted its last meeting, where officials emphasized their commitment to tackling inflation, leading to speculation about future rate changes. This backdrop of economic anxiety has heightened the scrutiny of financial stocks.[2]
What’s next
The Federal Reserve is expected to announce its next decision regarding interest rates on June 15, 2026. Investors will closely monitor this meeting as companies like JPMorgan Chase, American Express, and Progressive prepare for the potential impacts on their business models and stock performance.[3]
