CME Benefits From Volatile Markets Through High Trading Volume and Revenue

CME Group enjoyed favorable market conditions in 2024 as volatility across multiple asset classes drove increased trading volume, leading to strong revenue growth. Before 2023, the most significant headwind for the company had been the impact that low short-term interest rates had on its interest-rate futures, which are 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. However, since 2023 this complacency has been replaced by heightened uncertainty, swinging interest-rate futures volume from a cyclical low to a cyclical high, driving accelerated growth. That said, we think this tailwind has mostly played out, and we expect interest-rate futures growth to be slower as conditions normalize.