What if… Fed raises interest rates by 25 bps after September 2026 meeting

◇ Hypothetical scenario. What if… Fed raises interest rates by 25 bps after September 2026 meeting? The analysis positions IBKR, COF and BAC to benefit and DHI, RKT and LEN under pressure; confidence high.

Hypothetical scenario — this analysis maps conditional exposure (“if this happens, who is exposed”). It is not graded against market prices unless the event occurs.

Analyzed 2026-08-30 — point-in-time, never revised. A hypothetical scenario is never graded.

Ranked exposures

  1. ▼ DHI DR Horton — impact -76 · confidence high · horizon immediate · 1st order
    Higher mortgage rates reduce D.R. Horton's new-home sales by weakening affordability and buyer purchasing capacity.
    Chain: Fed lifts policy rate 25 basis points → mortgage rates reset higher for buyers → monthly payment affordability deteriorates for entry buyers → orders slow and incentives rise → gross margin and closings volume fall
    What would break the call: Long-end Treasury yields fall after the hike, pulling 30-year mortgage rates down and reviving order growth.
  2. ▼ RKT Rocket — impact -76 · confidence medium · horizon weeks · 1st order
    Higher mortgage rates reduce Rocket Companies' refinance and purchase originations by suppressing borrower applications.
    Chain: policy rate increase lifts mortgage benchmark yields → fewer loans sit in the money → refinance application volume contracts sharply → origination volume and gain-on-sale revenue fall
    What would break the call: Mortgage spreads to Treasuries narrow sharply, keeping note rates flat and sustaining refinance application volume.
  3. ▼ LEN Lennar — impact -73 · confidence high · horizon immediate · 1st order
    Higher mortgage rates weaken Lennar's orders by reducing buyer affordability and requiring wider rate buydowns.
    Chain: higher policy rate raises mortgage funding costs → buyer qualification thresholds tighten at Lennar communities → rate buydown incentives widen to clear inventory → homebuilding gross margin and orders decline
    What would break the call: Lennar reports stable gross margin with flat incentive load in the next quarterly release.
  4. ▲ IBKR Interactive Brokers — impact +72 · confidence low · horizon immediate · 1st order
    Interactive Brokers earns more net interest on segregated client cash balances as the fed funds target moves higher.
    Chain: fed funds target moves 25 basis points higher → short-term investment yields reprice immediately → segregated client cash earns higher yield → net interest income per account rises
    What would break the call: Client cash balances migrate into money market funds, shrinking the interest-earning segregated balance.
  5. ▲ COF Capital One — impact +71 · confidence low · horizon weeks · 1st order
    Capital One collects higher interest income on variable-rate credit card balances as benchmark borrowing costs increase.
    Chain: policy rate rises 25 basis points → card APRs tied to prime reset higher → interest income on revolving balances increases → net interest margin widens if credit holds
    What would break the call: Card net charge-off rate climbs sharply, forcing larger provisions that exceed the interest income gain.
  6. ▼ SPG Simon Property — impact -70 · confidence low · horizon immediate · 2nd order
    Simon Property Group property valuations fall when capitalization rates increase after hikes.
    Chain: policy rate increase lifts real estate discount rates → capitalization rates expand on retail assets → net asset value per share declines → refinancing costs on mall debt rise
    What would break the call: Simon reports rising releasing spreads and occupancy gains that offset cap rate pressure on valuation.
  7. ▼ TSLA Tesla — impact -70 · confidence low · horizon immediate · 2nd order
    Tesla auto sales drop when customer loan rates climb after the rate decision.
    Chain: policy rate increase raises auto loan benchmark rates → monthly payment on a financed vehicle rises → marginal buyers defer purchase or downgrade → Tesla cuts price or boosts financing subsidy
    What would break the call: Tesla delivery growth accelerates on new model launches despite higher financing rates.
  8. ▼ UWMC UWM — impact -70 · confidence low · horizon weeks · 1st order
    Higher borrowing costs shrink the origination pool, squeezing wholesale volumes and gain-on-sale margins.
    Chain: higher policy rate lifts mortgage note rates → total origination market volume contracts → broker channel competition intensifies on price → gain-on-sale margin and volume both fall
    What would break the call: UWM gains wholesale market share fast enough to grow volume while the total market shrinks.
  9. ▲ BAC Bank of America — impact +70 · confidence low · horizon quarters · 1st order
    Bank of America collects higher interest on loans to lift its overall revenue.
    Chain: fed funds target rises 25 basis points → floating-rate commercial loans reprice upward → securities reinvestment yields improve gradually → net interest income guidance moves higher
    What would break the call: Deposit betas jump as customers rotate into higher-yielding alternatives, offsetting the asset yield gain.
  10. ▼ CCI Crown Castle — impact -69 · confidence low · horizon weeks · 2nd order
    Crown Castle pays more to refinance debt, reducing cash flow available for network investment and dividends.
    Chain: policy rate increase lifts corporate borrowing benchmarks → Crown Castle refinances maturing debt at higher coupons → interest expense rises against fixed tower revenue → AFFO per share and dividend coverage weaken
    What would break the call: Crown Castle terms out debt early at locked low coupons, insulating interest expense for several years.
  11. ▲ JPM JPMorgan Chase — impact +68 · confidence medium · horizon quarters · 1st order
    Higher rates expand JPMorgan Chase's net interest income by lifting yields on floating-rate loans and reinvested assets.
    Chain: policy rate rises 25 basis points → floating-rate loans and cash reprice immediately → deposit costs lag the asset repricing → net interest income expands for several quarters
    What would break the call: JPMorgan guides net interest income lower on deposit repricing and weaker loan growth.
  12. ▲ ARCC Ares Capital — impact +68 · confidence low · horizon weeks · 2nd order
    Ares Capital receives higher coupon income as most portfolio loans reset upward with short-term benchmark rates.
    Chain: policy rate increase lifts SOFR benchmark → floating-rate portfolio loans reset coupons higher → Ares Capital net investment income per share rises → borrower interest coverage tightens over time
    What would break the call: Non-accruals rise materially as leveraged borrowers fail higher coverage tests, erasing the coupon gain.
  13. ▼ AAPL Apple — impact -65 · confidence low · horizon immediate · 3rd order
    Apple device sales volumes fall as consumers reduce spending after rate hikes.
    Chain: rate hike tightens consumer credit conditions → household discretionary budgets shrink at the margin → device upgrade cycles lengthen further → iPhone and Mac unit revenue growth slows
    What would break the call: Apple reports record iPhone revenue driven by a new product cycle despite tighter consumer credit.
  14. ▲ USB US Bancorp — impact +65 · confidence low · horizon weeks · 1st order
    US Bancorp raises lending rates faster than deposit costs to expand margins.
    Chain: fed funds target moves higher → commercial and consumer loan yields reprice upward → deposit repricing lags on core checking balances → net interest margin expands modestly
    What would break the call: Deposit competition forces US Bancorp to raise rates quickly, flattening net interest margin guidance.
  15. ▼ VZ Verizon — impact -63 · confidence low · horizon weeks · 2nd order
    Verizon's substantial debt burden becomes more expensive to refinance, pressuring free cash flow and valuation.
    Chain: policy rate increase raises corporate bond yields → Verizon refinances large maturities at higher coupons → interest expense rises against slow wireless growth → free cash flow and dividend coverage tighten
    What would break the call: Verizon accelerates debt paydown with asset sales, cutting interest expense despite higher market yields.
  16. ▼ UPST Upstart — impact -62 · confidence low · horizon weeks · 2nd order
    Upstart faces funding partners demanding higher yields, cutting approval volume and the fees collected per origination.
    Chain: policy rate rise lifts funding partner hurdle yields → Upstart tightens approval thresholds to meet returns → loan origination volume through the platform falls → platform and referral fee revenue declines
    What would break the call: Upstart secures committed multi-year funding capacity at fixed terms, insulating origination volume from rate moves.
  17. ▲ SCHW Charles Schwab — impact +61 · confidence medium · horizon weeks · 1st order
    Higher rates widen Charles Schwab's net interest margin as client cash balances and margin loans reprice upward.
    Chain: fed funds target rises 25 basis points → bank sweep and margin loan yields reprice → Schwab net interest revenue per account rises → earnings expand if cash sorting stays contained
    What would break the call: Client cash sorting reaccelerates, shrinking low-cost sweep deposits and forcing costly supplemental funding.
  18. ▼ AMZN Amazon — impact -60 · confidence low · horizon immediate · 3rd order
    Amazon experiences reduced sales volumes significantly as higher rates curb discretionary purchases.
    Chain: rate hike tightens household credit and savings incentive → discretionary goods spending slows at the margin → Amazon retail unit volumes grow more slowly → North America retail revenue growth decelerates
    What would break the call: Amazon reports accelerating retail unit growth alongside strong AWS margins, overriding consumer weakness.
  19. ▲ WFC Wells Fargo — impact +60 · confidence low · horizon weeks · 1st order
    Wells Fargo boosts pricing on new mortgages after the rate hike occurs.
    Chain: policy rate increase lifts loan benchmark yields → Wells Fargo reprices new loans higher → net interest income rises as deposits lag → mortgage origination fee revenue falls partly offsetting
    What would break the call: Mortgage banking revenue collapse and weak loan demand outweigh the net interest income benefit.
  20. ▼ O Realty Income — impact -57 · confidence medium · horizon weeks · 2nd order
    Higher rates widen Realty Income's cost of capital and weaken returns on debt-funded property acquisitions.
    Chain: policy rate increase lifts bond yields and cap rates → Realty Income cost of debt and equity rises → investment spread on new acquisitions narrows → external growth and AFFO per share slow
    What would break the call: Realty Income reports acquisition cap rates rising faster than its cost of capital, widening the spread.
  21. ▼ PLD Prologis — impact -57 · confidence low · horizon weeks
    Prologis faces higher property financing costs and lower asset valuations as real estate capitalization rates rise.
  22. ▲ CME CME Group — impact +57 · confidence medium · horizon immediate
    Tighter policy increases CME Group's rate-hedging activity as investors reposition across Treasury and SOFR futures.
  23. ▼ OPEN Opendoor — impact -56 · confidence low · horizon quarters
    Opendoor finances held inventory at steeper rates while resale demand cools, compressing contribution profit per house.
  24. ▲ FHI Federated Hermes — impact +56 · confidence low · horizon quarters
    Federated Hermes gathers larger money market fund balances as short-term yields rise, increasing asset-based management fees.

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