CME Stands to Benefit From Rising Interest Rates as Volatility Returns to Its Markets

After two years of disappointing revenue growth, CME Group is enjoying far more favorable market conditions in 2022 as volatility across multiple asset classes drives increased trading volume. In recent years, the most significant headwind for the company has been the impact that low short-term interest rates had on its interest rate complex, which is its largest source of revenue. When interest rates are expected to stay low there is less need for interest rate hedging and less incentive for speculation, creating a drag on CME's trading volume. With interest rates rising in 2022, this drag has been removed, benefiting the company's growth.