With 40-year high inflation rates, continuing supply chain disruptions, and a strong labor market, the Federal Reserve is expected to hike interest rates multiple times this year. The first interest rate increase is expected to come in March. This bodes well for financial institutions, which should benefit from higher interest rates.
Investors’ interest in the financial sector is evidenced by the SPDR Select Sector Fund - Financial’s (XLF) 16.5% returns over the past year. In addition, according to a Globe Newswire report, the global financial services market is expected to grow at a 6% CAGR through 2025.
