Upstart(US:UPST) The Motley Foolยท2025-08-22 20:08Group 1 - Federal Reserve Chair Jay Powell hinted at potential interest rate cuts, leading to a rally in fintech stocks like Upstart, which saw its shares increase by over 8% [1][2] - Upstart is a technology-driven originator of personal loans, and the level of short-term interest rates significantly impacts the buying appetite of third-party loan buyers [2][4] - Rate hikes previously caused a decline in Upstart's revenue growth as third-party loan buyers left the platform, forcing the company to hold some loans on its balance sheet [4][6] Group 2 - Powell's speech indicated a balanced approach to risks, suggesting that a slowing job market could lead to more interest rate cuts, which would benefit Upstart by lowering the cost of capital for its loan buyers [5][6] - While rate cuts are generally favorable for Upstart, concerns remain regarding borrowers' ability to repay loans if cuts are due to job losses, which could affect the risk appetite of loan buyers [8][9] - Inflation remains above the Fed's 2% target, and any acceleration in inflation data could derail plans for interest rate cuts, indicating ongoing risks for the economy and Upstart [9]