With its enormous cash reserves now earning next to nothing, Apple could be one of the bigger corporate beneficiaries of the Federal Reserve’s expected moves to raise short-term interest rates to about 2% by year-end.
[Berkshire Hathaway’s] earnings in 2023 could rise about 8% simply from the higher yields on its cash, Barron’s estimates.
Other big companies that should gain are cash-rich Apple and Alphabet . Apple had $203 billion of cash and equivalents at year-end 2021, and Alphabet was sitting on $139 billion.
Apple could be earning $4 billion more on its cash by 2023 and Alphabet nearly $3 billion. Higher interest income could boost Apple’s net income by about 3% next year, and Alphabet’s earnings may get a 4% lift… With Federal Reserve monetary policy makers anticipating that the benchmark federal-funds rates will be about 2% by year-end and moving toward 2.5% or higher in 2023, Berkshire stands to earn $3 billion or more on its cash in 2023.
MacDailyNews Take: Cash could be looking a bit less trashy with each rate hike.
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