FOMC Pauses Rate Cuts, Custody Banks Stand to Benefit
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 01 2026
0mins
Source: NASDAQ.COM
- FOMC Policy Update: The Federal Open Market Committee decided to hold the federal funds rate between 3.50% and 3.75% this week, marking the first pause after three consecutive cuts, reflecting a cautious stance amid economic expansion, stable unemployment, and elevated inflation.
- Positive Bank Stock Reaction: Following the FOMC decision, State Street's stock rose approximately 2.5% to around $131 per share, while BNY Mellon shares increased about 2% to $121 per share, indicating market optimism regarding the profitability of these major custody banks in a stable rate environment.
- Revenue Source Analysis: BNY Mellon and State Street manage $59.3 trillion and $53.8 trillion in assets, respectively, with the majority of their revenue derived from service fees, generating approximately $5.2 billion and $3.7 billion in fees in Q4, showcasing their stability and profitability in a high-interest-rate environment.
- Future Growth Potential: Analysts rate both stocks as buys, with State Street's price target at $145 per share, suggesting an 11% upside, while BNY Mellon's target is $136 per share, indicating a 13% return, reflecting expectations for continued higher net interest income in the coming months.
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Analyst Views on BK
Wall Street analysts forecast BK stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BK is 125.59 USD with a low forecast of 109.00 USD and a high forecast of 145.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
8 Buy
4 Hold
0 Sell
Moderate Buy
Current: 120.510
Low
109.00
Averages
125.59
High
145.00
Current: 120.510
Low
109.00
Averages
125.59
High
145.00
About BK
The Bank of New York Mellon Corporation is a global financial services company. The Company’s business segment includes Securities Services, Market and Wealth Services and Investment and Wealth Management. The Securities Services business segment consists of Asset Servicing and Issuer Services, which provide business solutions across the transaction life cycle to its global asset owner and asset manager clients. The Market and Wealth Services business segment consists of three lines of business, Pershing, Treasury Services and Clearance and Collateral Management, which provide business services and technology solutions. Its Investment and Wealth Management business segment deliver a diversified portfolio of investment strategies independently, and through its global distribution network, to institutional and retail clients globally. It provides investment management, custody, wealth and estate planning, private banking services, investment servicing and information management.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Dividend Safety Overview: A list of the top ten large-cap stocks with the highest dividend safety grades has been compiled, reflecting a diverse range of sectors including semiconductors, insurance, and asset management, showcasing investment portfolio diversity.
- Top Rated Companies: Analog Devices (ADI) leads with an A+ dividend safety grade, followed closely by Applied Industrial Technologies (AIT) and Assurant (AIZ), indicating their strong capacity to maintain dividend payments.
- Industry Representation: The list features semiconductor giant Broadcom (AVGO) with a market cap of $1.46 trillion, alongside financial services firms like Ameriprise Financial (AMP) and The Bank of New York Mellon (BK), highlighting stability and attractiveness across sectors.
- Rating Criteria Explained: The dividend safety grade evaluates not only the current yield but also multiple financial factors to assess a company's ability to sustain dividends under various market conditions, with grades of B- or above considered a Buy and D+ or below a Sell.
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- Sub-Adviser Renaming: The sub-adviser for the BNY Mellon High Yield Strategies Fund, Alcentra NY, LLC, has been renamed BSP NY LLC, with all references in the fund's documentation updated accordingly to ensure brand consistency and clarity.
- Asset Management Scale: As of December 31, 2025, BNY Investments manages $2.2 trillion in assets, underscoring its significant position in the global asset management industry and reinforcing its market leadership.
- Historic Bank: Established in 1784, BNY is America's oldest bank, currently overseeing $59.3 trillion in assets under custody and/or administration, demonstrating its deep-rooted foundation and extensive influence in capital markets.
- Investor Advisory: The release highlights that the investment returns and principal values of closed-end funds may fluctuate, cautioning investors that their shares could trade below or above the fund's net asset value, thereby emphasizing the importance of careful investment risk assessment.
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FOMC Pauses Rate Cuts, Market Reacts Positively
- Rate Decision Pause: The FOMC decided to maintain the federal funds rate between 3.50% and 3.75% this week, citing an expanding economy, stabilized unemployment, and elevated inflation, indicating a cautiously optimistic outlook on economic conditions.
- Market Stability Expectations: According to the CME FedWatch survey, the market widely anticipates that rates will remain unchanged until the June FOMC meeting, providing stability that generally favors technology and growth stocks.
- Financial Stocks Rally: Following the FOMC decision, State Street and BNY Mellon stocks rose approximately 2.5% and 2%, respectively, reflecting market optimism about sustained net interest income growth for these leading custody banks in the coming months.
- Analysts Favorable Outlook: Analysts have rated both State Street and BNY Mellon as “buys,” with price targets of $145 and $136 per share, suggesting upside potentials of 11% and 13%, respectively, highlighting their stable growth prospects in a high-interest-rate environment.
See More
FOMC Pauses Rate Cuts, Custody Banks Stand to Benefit
- FOMC Policy Update: The Federal Open Market Committee decided to hold the federal funds rate between 3.50% and 3.75% this week, marking the first pause after three consecutive cuts, reflecting a cautious stance amid economic expansion, stable unemployment, and elevated inflation.
- Positive Bank Stock Reaction: Following the FOMC decision, State Street's stock rose approximately 2.5% to around $131 per share, while BNY Mellon shares increased about 2% to $121 per share, indicating market optimism regarding the profitability of these major custody banks in a stable rate environment.
- Revenue Source Analysis: BNY Mellon and State Street manage $59.3 trillion and $53.8 trillion in assets, respectively, with the majority of their revenue derived from service fees, generating approximately $5.2 billion and $3.7 billion in fees in Q4, showcasing their stability and profitability in a high-interest-rate environment.
- Future Growth Potential: Analysts rate both stocks as buys, with State Street's price target at $145 per share, suggesting an 11% upside, while BNY Mellon's target is $136 per share, indicating a 13% return, reflecting expectations for continued higher net interest income in the coming months.
See More
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- Partnership Announcement: BNY and the Williams F1 Team have announced a long-term partnership, leveraging their shared commitment to excellence and innovation to drive future success, particularly with the upcoming era of new F1 regulations.
- Market Influence Enhancement: By collaborating with Williams, BNY aims to utilize the global reach of F1 to strengthen client relationships and enhance brand visibility in key financial hubs, potentially attracting more financial clients.
- Brand Exposure Opportunities: BNY's branding will be featured on Williams' cars and team gear, including the drivers' Halo and chassis design, with the first appearance set for the 2026 season opener, further boosting brand recognition in the market.
- Strategic Vision Alignment: The shared values of innovation and operational efficiency between the two organizations will foster future collaboration, with BNY's global financial services platform supporting Williams in achieving long-term success on the F1 circuit.
See More
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- Partnership Announcement: BNY and the Williams F1 Team have established a long-term partnership, leveraging their respective legacies of 242 years in global capital markets and nearly 50 years in Formula 1 to drive innovation and performance together.
- Market Opportunity: This collaboration allows BNY to engage with financial audiences through unique branding opportunities across 24 races, utilizing Formula 1 as a global platform to strengthen client relationships and enhance brand visibility.
- Brand Visibility: BNY's branding will feature prominently on the Williams F1 Team's driver and team kits, including key placements on the chassis and Halo, with the debut set for February 3rd during the team's livery launch, aiming to capture global audience attention.
- Future Aspirations: The Team Principal of Williams expressed enthusiasm for collaborating with BNY to explore innovative opportunities, aiming for long-term success both on the track and in global markets, reflecting a shared commitment to high performance and innovation.
See More
Top 10 Large Cap Stocks with Highest Dividend Safety Grades
- Dividend Safety Overview: A list of the top ten large-cap stocks with the highest dividend safety grades has been compiled, reflecting a diverse range of sectors including semiconductors, insurance, and asset management, showcasing investment portfolio diversity.
- Top Rated Companies: Analog Devices (ADI) leads with an A+ dividend safety grade, followed closely by Applied Industrial Technologies (AIT) and Assurant (AIZ), indicating their strong capacity to maintain dividend payments.
- Industry Representation: The list features semiconductor giant Broadcom (AVGO) with a market cap of $1.46 trillion, alongside financial services firms like Ameriprise Financial (AMP) and The Bank of New York Mellon (BK), highlighting stability and attractiveness across sectors.
- Rating Criteria Explained: The dividend safety grade evaluates not only the current yield but also multiple financial factors to assess a company's ability to sustain dividends under various market conditions, with grades of B- or above considered a Buy and D+ or below a Sell.
See More
BNY Mellon High Yield Strategies Fund Rebrands Sub-Adviser
- Sub-Adviser Renaming: The sub-adviser for the BNY Mellon High Yield Strategies Fund, Alcentra NY, LLC, has been renamed BSP NY LLC, with all references in the fund's documentation updated accordingly to ensure brand consistency and clarity.
- Asset Management Scale: As of December 31, 2025, BNY Investments manages $2.2 trillion in assets, underscoring its significant position in the global asset management industry and reinforcing its market leadership.
- Historic Bank: Established in 1784, BNY is America's oldest bank, currently overseeing $59.3 trillion in assets under custody and/or administration, demonstrating its deep-rooted foundation and extensive influence in capital markets.
- Investor Advisory: The release highlights that the investment returns and principal values of closed-end funds may fluctuate, cautioning investors that their shares could trade below or above the fund's net asset value, thereby emphasizing the importance of careful investment risk assessment.
See More
FOMC Pauses Rate Cuts, Market Reacts Positively
- Rate Decision Pause: The FOMC decided to maintain the federal funds rate between 3.50% and 3.75% this week, citing an expanding economy, stabilized unemployment, and elevated inflation, indicating a cautiously optimistic outlook on economic conditions.
- Market Stability Expectations: According to the CME FedWatch survey, the market widely anticipates that rates will remain unchanged until the June FOMC meeting, providing stability that generally favors technology and growth stocks.
- Financial Stocks Rally: Following the FOMC decision, State Street and BNY Mellon stocks rose approximately 2.5% and 2%, respectively, reflecting market optimism about sustained net interest income growth for these leading custody banks in the coming months.
- Analysts Favorable Outlook: Analysts have rated both State Street and BNY Mellon as “buys,” with price targets of $145 and $136 per share, suggesting upside potentials of 11% and 13%, respectively, highlighting their stable growth prospects in a high-interest-rate environment.
See More
FOMC Pauses Rate Cuts, Custody Banks Stand to Benefit
- FOMC Policy Update: The Federal Open Market Committee decided to hold the federal funds rate between 3.50% and 3.75% this week, marking the first pause after three consecutive cuts, reflecting a cautious stance amid economic expansion, stable unemployment, and elevated inflation.
- Positive Bank Stock Reaction: Following the FOMC decision, State Street's stock rose approximately 2.5% to around $131 per share, while BNY Mellon shares increased about 2% to $121 per share, indicating market optimism regarding the profitability of these major custody banks in a stable rate environment.
- Revenue Source Analysis: BNY Mellon and State Street manage $59.3 trillion and $53.8 trillion in assets, respectively, with the majority of their revenue derived from service fees, generating approximately $5.2 billion and $3.7 billion in fees in Q4, showcasing their stability and profitability in a high-interest-rate environment.
- Future Growth Potential: Analysts rate both stocks as buys, with State Street's price target at $145 per share, suggesting an 11% upside, while BNY Mellon's target is $136 per share, indicating a 13% return, reflecting expectations for continued higher net interest income in the coming months.
See More
BNY Partners with Williams F1 Team for Long-Term Collaboration
- Partnership Announcement: BNY and the Williams F1 Team have announced a long-term partnership, leveraging their shared commitment to excellence and innovation to drive future success, particularly with the upcoming era of new F1 regulations.
- Market Influence Enhancement: By collaborating with Williams, BNY aims to utilize the global reach of F1 to strengthen client relationships and enhance brand visibility in key financial hubs, potentially attracting more financial clients.
- Brand Exposure Opportunities: BNY's branding will be featured on Williams' cars and team gear, including the drivers' Halo and chassis design, with the first appearance set for the 2026 season opener, further boosting brand recognition in the market.
- Strategic Vision Alignment: The shared values of innovation and operational efficiency between the two organizations will foster future collaboration, with BNY's global financial services platform supporting Williams in achieving long-term success on the F1 circuit.
See More
BNY Partners with Williams F1 Team for Long-Term Collaboration
- Partnership Announcement: BNY and the Williams F1 Team have established a long-term partnership, leveraging their respective legacies of 242 years in global capital markets and nearly 50 years in Formula 1 to drive innovation and performance together.
- Market Opportunity: This collaboration allows BNY to engage with financial audiences through unique branding opportunities across 24 races, utilizing Formula 1 as a global platform to strengthen client relationships and enhance brand visibility.
- Brand Visibility: BNY's branding will feature prominently on the Williams F1 Team's driver and team kits, including key placements on the chassis and Halo, with the debut set for February 3rd during the team's livery launch, aiming to capture global audience attention.
- Future Aspirations: The Team Principal of Williams expressed enthusiasm for collaborating with BNY to explore innovative opportunities, aiming for long-term success both on the track and in global markets, reflecting a shared commitment to high performance and innovation.
See More
