Sofi Technologies (SOFI.US) CEO: Expect the Fed to cut interest rates by 75 bps this year

SoFi Technologies (SOFI.US) CEO Anthony Noto expects the Federal Reserve to cut interest rates by 75 basis points in 2024, saying the move would benefit the company's loan demand and free up investment cash for other companies, Noto said on Monday.

He said: "It's better to cut 50 basis points now because it would stimulate more economic activity next year because companies are making decisions now for next year. If they knew that their debt costs on their massive balance sheets could be cut by 50 basis points, they could hire more, invest more, or just get the signal of a rate cut."

Noto said SoFi was facing a prospect of operating in a "stable" economy and lower rates, which gave the company "more freedom" on its balance sheet. "We're going to do as much mortgage origination as we can because it's a light capital business. We're also going to be very aggressive on student loans to lower rates and give people good savings."

Noto said overall loan demand "has significantly increased over the past 18 months." He added: "Another 100 basis points of rate cuts would just make those loans more attractive to buyers, and we have some other projects as well."

Noto said the lower cost of borrowing for businesses would allow them to reduce debt spending and invest more in technology and hiring, which would help SoFi's technology platform business.

Noto said the "most underrated" part of SoFi's business was creating "products above products." Among the potential products, the company is internally testing a product called "Cash Coach" that would look at all the cash held by SoFi and other connected places and give users suggestions on how to better optimize their money.

SoFi shares closed up 1.2% on Monday. The stock has fallen about 28% this year, while the S&P 500 has risen about 15% in the same period.