Bank of America (BofA) CFO Alastair Borthwick made that observation during a media call last week. Coming out of the pandemic, “rates went from 0% to 4% and 5% very, very quickly, and that was a period of a lot of adjustment, making it very difficult for CEOs and CFOs to make long-term decisions,” Borthwick said.

That dynamic is less true today, based on what BofA is seeing from investment banking clients, he said. We now appear to be a low-growth economy, with inflation coming down, Borthwick said. “We’ve got an interest rate structure that’s a little less volatile, and that means the clients, I think, are more interested in expressing a view for the long-term,” he said.

In Q3, BofA grew investment banking fees 18% year over year to $1.4 billion as clients’ confidence increased in taking on more debt and equity issuance. This appears to be a trend as, in addition to BofA, during Q3, investment banking fees across the board for big banks such as Wells Fargo, Goldman Sachs, J.P. Morgan, Citigroup, and Morgan Stanley, were up year over year, which is seen as a positive by Wall Street. 

“A higher but stable interest rate environment provides more certainty, allowing business the ability to do more long-term strategic planning,” Mark T. Williams, a finance faculty member at Boston University’s Questrom School of Business, told me. “That’s probably why you’re seeing more investment banking activity as well,” he added.

The 10-year treasury hit 4.19% on Monday, a high not seen since July 2024, said Williams, a former bank examiner for the Federal Reserve. On Sept. 18, the Fed announced a 50-basis point cut to its benchmark interest rate, which is the first rate cut in four years.

Three weeks ago, a very strong jobs report surprised the market, and then we had inflation that seemed to be kind of in control, Williams said. “At best, I think the prediction is that the Fed’s going to reduce rates maybe by 25 basis points at its next meeting, and that’s what really pushed the Treasury back up,” he said. The Federal Open Market Committee will meet again Nov. 6-7.

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

Shawn Cross was named CFO at Pacira BioSciences, Inc. (Nasdaq: PCRX), a non-opioid pain therapy provider. Cross brings more than 25 years of experience. Before Pacira, he served at Applied Molecular Transport, Inc. (AMT), a biopharmaceutical company. He initially served as AMT’s CFO and led the company through its initial public offering. Cross was subsequently promoted to President and Chief Operating Officer and later named Chief Executive Officer to lead the company’s merger with Cyclo Therapeutics, Inc.

Michael Fitzmaurice was named CFO at Rexford Industrial Realty, Inc. (NYSE: REXR), a real estate investment trust, effective Nov. 18. Fitzmaurice succeeds Laura Clark, who was promoted to the role of chief operative officer. Fitzmaurice brings 25 years of experience. He most recently served as EVP, CFO of RPT Realty. Before that, Fitzmaurice served as VP and then SVP of Finance for Retail Properties of America, Inc.

Big deal

New research by S&P Global Market Intelligence finds that in the first three quarters of this year, generative AI startups secured over $20 billion in venture capital funding. That puts 2024 on track to exceed the 2023 total of $22.7 billion, according to the report. 

The second quarter was boosted by X.AI Corp.’s $6 billion funding deal, while the third quarter was led by Sam Altman's OpenAI securing $6.6 billion. According to S&P Global Market Intelligence, the momentum is set to continue, with Anthropic, which already raised $8.8 billion, reportedly in discussions for another fundraising round.

Going deeper

“Can Money Buy Happiness for Millionaires?” is an article in Wharton’s business journal that explores new research to answer that question. Wharton’s Matt Killingsworth suggests that happiness keeps increasing with income, far beyond expected. While the research doesn’t prove that money causes happiness, it adds to growing evidence that the two are closely linked, according to the report.

Overheard

“Instead of trying to embed new cultures through training and persuasion rhetoric, let’s engineer culture change in the simplest way: through changing working practices.”

—Keith Ferrazzi, an executive team coach, keynote speaker, and the founder of Ferrazzi Greenlight, writes in a Fortune opinion piece. His forthcoming book is Never Lead Alone: 10 Shifts from Leadership to Teamship.