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The Federal Reserve announced on July 29 that it plans to keep benchmark interest rates near zero and it has left its bond-buying program unchanged for now. However, rising financial transactions and capital market activities are helping financial sector growth. Furthermore, the Fed has signaled two interest rate hikes as soon as late 2023, which should help financial companies increase their interest income. According to Globe Newswire, the global financial services market is expected to grow at a 9,9% CAGR to hit $22.5 trillion this year. Consequently, both WFC and BAC are expected to benefit in the coming quarters.
WFC’s shares have gained 53.7% over the six months, while BAC’s returned 29.4%. Also, WFC’s 86.4% gains over the past year are significantly higher than BAC’s 54.4% returns. WFC is the clear winner with 114.2% gains versus BAC’s 61.9% in terms of the past nine months’ performance.
