“Therefore, if you were to assume the Fed funds rate moves much lower than the current market expectations, perhaps approaching the 2% level, we would still anticipate delivering year-over-year earnings growth of at least 10%, probably a bit better, holding all else equal.”

In context

“ic revenue sensitivities based on year-end 2025 levels. These high-level sensitivities are intended to serve as a complement to the scenario we just walked through, helping you adjust estimates and shape your own perspective around 2026. While most of you are quite familiar with this page, given the focus on the potential path of interest rates, it may be worth spending a moment on the net interest revenue sensitivity. Throughout 2025, we took a number of steps to further enhance our flexibility and financial management capabilities, including standing up a hedge program that helped reduce our interest rate sensitivity by about 1/3. We have continued to build out these capabilities in the early days of 2026 by putting in place a modest amount of income hedges against our margin loan book. Therefore, if you were to assume the Fed funds rate moves much lower than the current market expectations, perhaps approaching the 2% level, we would still anticipate delivering year-over-year earnings growth of at least 10%, probably a bit better, holding all else equal. Of course, there would be other moving pieces to consider in that environment. And although interest rates are an important macro factor, the combination of our enhanced balance sheet management and inherent offsets within our model keeps us well positioned for financial growth across a range of environments. So in closing, we are entering 2026 with strong momentum following a record 2025, where we delivered growth on all fronts. Yet, as Rick outlined earlier on the call, we have tremendous opportunities still in front of us across nearly all areas of our business. Schwab's combination of an increasingly diverse revenue mix, industry-leading scale, enhanced financial capabilities to manage across a range of environments as well as capital return position us to deliver meaningful earnings”