“We have taken steps to limit expense growth, and we now expect full year expense growth to be on the lower end of the 7% to 8% range we communicated a few months ago.”

In context

“ital return, our consolidated Tier 1 leverage ratio finished above our operating objective. Despite the challenging equity markets, we feel very confident about our ability to continue driving strong revenue growth even as we maintain a high level of capital return. Assuming the Fed funds rate exits 2022 at 4.5%, we’d expect to produce an 11% to 13% year-over-year increase in revenue, consistent with the scenario we shared earlier. That reflects continued expansion of our net interest margin to the mid-210s in Q4, a roughly 10% to 12% decline in average interest-earning assets from December 2021 to December 2022, and net interest revenue higher than Q3 despite continued client cash allocations decisions and some limited and temporary borrowing from the FHLB to fund some of those outflows. We have taken steps to limit expense growth, and we now expect full year expense growth to be on the lower end of the 7% to 8% range we communicated a few months ago. Looking ahead to 2023, we continue to see no reason that the magnitude of client cash sorting will be dramatically different than the last rising rate cycle, suggesting balances trough at some point next year. We have ample sources of liquidity to support our clients and anticipate growth in both net interest margin and net interest revenue from Q4 of this year to Q4 of next year and beyond. And of course, you can expect that the higher pace of capital return we started in Q3 will continue. There’s obviously been a lot of commentary, perhaps too much on the topic of client cash sorting. And we continue to receive a lot of questions. I want to emphasize that this is a dynamic, which we view as very much temporary, quite manageable and not a factor in our long-term performance. I want to re”