On September 16, the FOMC raised the federal funds target range a quarter point to 3.75% to 4.00%. The vote was 12 to 0, the first increase since 2023, and sixteen of eighteen participants expect at least one more this year. Chair Kevin Warsh called it removing a dose of accommodation, a careful way of saying he does not think policy is tight yet.
The bigger number is not the one the Fed sets. As of September 28, the ten-year Treasury yielded 5.24% and the thirty-year 5.56%, the highest since 2007. That is the rate that prices corporate refinancing and discounts cash flows arriving a decade out.
So I asked a narrower question than “which stocks benefit from a hike.” I asked which businesses are indifferent to what credit costs. Eighteen candidates went through the six-pillar framework. Five cleared. What connects them is not their industry. It is where their money comes from.
Why 5.24% is the real story
Most writing about rising rates was built for 2022. That was a demand cycle with an inverting curve. This one is cost-push, with Brent settling above $101 on September 9, and the curve is steeply positive: 4.53% at one year, 5.24% at ten, 5.56% at thirty.
Three things change. Debt from the cheap years matures into a market demanding 5% plus a spread. Every capital project now competes against a risk-free 5.24%, and Warsh noted that debt competition from the AI buildout is part of why yields rose. And input costs climb at the same time, so a company absorbs a higher discount rate and a higher cost of goods in one quarter with no demand boom offsetting either.
A business funded internally, or out of money belonging to someone else, sidesteps the first two. Sometimes the rates that punish borrowers show up as revenue instead.
One caution. Float is not free money and a cash pile is not a business. Every name below cleared on moat, management, and business quality first.
Visa (V): funded by nobody
Visa runs the rails that move money between banks. It does not lend and owns very little. Its revenue is a percentage of nominal dollars spent, so when energy and food prices rise, its take rises automatically. Cost-push inflation arrives as a tailwind rather than a margin problem.
The quarter ended June 30 showed it. Net revenue was $11.6 billion, up 14%, with payments volume crossing $4 trillion for the first time. Service revenue grew 14% against 9% prior-quarter volume growth, and data processing grew 17% against 10% transaction growth. Management attributed both gaps primarily to pricing.
Competitive Moat and Business Quality carry the score. The network is two-sided and self-reinforcing, and trailing gross margin near 97.8% reflects almost no incremental cost per transaction.
The case against: operating expenses rose 19% in the quarter, including $563 million of severance, worth watching in a business built on operating leverage. Interchange litigation and regulatory attention are permanent features.
Visa traded around 24.9 times forward earnings on September 14, slightly below its five-year median near 25.7 per Zacks.
Progressive (PGR): funded by policyholders
Progressive collects premiums today and pays claims later. The gap is float, and it is invested.
The shape of that portfolio matters. At June 30 it stood at $97.2 billion with a 4.2% pretax book yield and a duration of 3.5 years. Short duration means the book rolls over fast, so new money works at today’s yields instead of 2021’s. Management extended duration slightly this year to capture higher rates. Investment income rose 13% year over year in Q1, to $917 million.
Management Quality is the standout. Progressive reports monthly, which almost nobody does, and runs to an explicit 96 combined ratio target. It came in at 86.4 in Q1 and 87.3 in Q2, and spends the surplus on growth rather than banking it.
The case against sits in that same number. The combined ratio widened from 86.2 a year earlier. A cost-push cycle raises parts, labor, and medical costs, the inputs to an auto claim. Rising rates help the asset side and hurt the liability side at once, and the net is not guaranteed.
Progressive traded at a trailing P/E of 10.43 on September 28, below its three, five, and ten-year averages per FullRatio.
ADP (ADP): funded by payroll escrow
ADP collects payroll money from employers before it is owed to employees and tax authorities, and holds the balance in between. The funds belong to clients, but the interest belongs to ADP.
In fiscal year 2026, average client balances were $40.4 billion at a 3.4% yield, producing $1.355 billion of interest revenue, up 14%. Fiscal 2027 guidance is $1.54 to $1.56 billion at roughly 3.7%.
Keep in mind, ADP states those assumptions come from fed funds futures and forward curves as of July 28, seven weeks before the hike and before the ten-year reached 5.24%.
Business Quality and Competitive Moat carry it. Payroll has brutal switching costs and an enormous compliance surface. Retention was 92.1%, revenue $21.9 billion up 7%, adjusted EBIT margin up 80 basis points to 26.8%.
The case against ADP is employment. Balances depend on how many people are paid and how much. A real labor downturn shrinks balances just as yields rise, and the two partly cancel. ADP also guided fiscal 2027 retention down 10 to 30 basis points.
CME Group (CME): funded by clearing margin
CME runs the futures exchanges and the clearing house behind them. As of June 30, it held $138.5 billion in its account at the Chicago Fed.
One thing to keep in mind is that most interest on clearing member cash is passed back to the clearing firms. CME keeps a spread, not the whole thing.
The better reason to own it is second-order. CME clears the interest rate complex, and uncertainty about rates means more hedging. The first half of 2026 was the strongest in company history, with Q2 average daily volume of 29.8 million contracts and open interest up 16% since January.
Competitive Moat is close to structural. Liquidity concentrates where liquidity already is, and margin offsets across correlated products cannot be matched by cutting fees. Q2 adjusted operating margin was 69.5%.
The case against CME is growth. Q2 revenue rose 1% and adjusted EPS rose 1%. Volumes depend on volatility, and a Fed that finishes hiking and goes quiet takes the driver away. CME scored lowest of the five on Growth Runway, and at roughly 22.1 times forward earnings as of August 11, it is the thinnest margin of safety here.
Cencora (COR): funded by suppliers
Cencora distributes pharmaceuticals, one of three doing it at national scale in the US. It collects from customers faster than it pays suppliers, so the working capital gap runs in its favor. The business is substantially financed by trade payables rather than lenders, on roughly $900 million of fiscal 2026 capex against revenue near $340 billion. Demand is about as rate-insensitive as it gets.
The quarter ended June 30: revenue $84.8 billion up 5.1%, adjusted operating income $1.2 billion up 17%, adjusted EPS $4.48 up 12%. Management raised full-year guidance and repurchased $1 billion of stock.
Business Quality looks strange in isolation, since operating margin was 1.32%. But a business turning capital over this fast does not need a fat margin to earn a high return on the capital actually invested.
Two risks. That 1.32% leaves no room for error, so one pricing dispute or lost contract moves the whole P&L. And the $4.6 billion OneOncology deal closed in February added integration risk and leverage to a balance sheet whose virtue was not needing much. Interest payments ran $358.2 million over nine months, up from $263.1 million.
Cencora traded near 20 times trailing earnings, below its three, five, and ten-year averages per FullRatio.
What would change my mind
Rates fall back quickly. A short oil spike that fades, with the ten-year retreating toward 4%, weakens the reason to group these names.
Claims and wage inflation outrun pricing. Sharpest for Progressive and Cencora. Watch the combined ratio trend, not its level.
Employment rolls over. ADP’s balances, Visa’s volumes, and Cencora’s utilization all need people working and spending.
Volatility normalizes. CME needs an uncertain rate environment.
Any of them starts borrowing to grow. A large debt-funded acquisition breaks the thesis for that name, regardless of how good the deal looks.
The long view
A theme is a lens, not a timing signal. I did not pick these because rates rose in September. I picked them because they are businesses worth owning for five years, and the current environment happens to show a shared strength unusually clearly.
That strength is unglamorous. Visa needs almost no capital. Progressive, ADP, and CME are financed by money belonging to their customers. Cencora is financed by its suppliers. When borrowed money doubles in cost, companies that never relied on it do not have to change anything.
Rates will move again, both directions, several times over any holding period worth having. These funding structures will still be there. That is the part worth owning.
Educational content only. This is not personalized investment advice, and the author is not acting as an investment advisor. Do your own research or consult a licensed professional before making any investment decision. The author may hold positions in the companies discussed. Past performance does not indicate future results, and no return is guaranteed.