Markets put a December Fed hike at 99% odds; Affirm's $259 million reserves and Chime's credit face the bill

The hike is priced, and the filings name who pays

Consumer prices rose 0.4% in October, above forecasts for a third straight month, and Federal Reserve Governor Christopher Waller put a half-point hike on the table if inflation momentum persists, a line Dallas Fed President Lorie Logan and Chicago Fed President Austan Goolsbee echoed ¹. Markets put a hike at the Fed's December meeting at 99% odds, and Goldman Sachs▼−0.23% — Goldman Sachs, down 0.23 percent today Asset Management's Lindsay Rosner calls it the firm's base case; The Inference priced that trade on November 10↗ ².

The filings since name who pays first: Affirm grew provisions and delinquencies into the print ³, Chime▲+5.03% — Chime, up 5.03 percent today is buying a bank to fund its rising first-time-borrower credit ⁴⁵, and Cash App is building lending on a banking base that has not grown since June ⁵⁶. Affirm▼−1.94% — Affirm, down 1.94 percent today and SoFi▼−2.23% — SoFi, down 2.23 percent today shares ended a second straight week lower ¹.

Affirm grew faster and reserved more

Affirm, the buy-now-pay-later lender, financed $14.4 billion of purchases in its September quarter, up 34%, a twelfth straight quarter above 30% growth; revenue rose 35% to $1.262 billion, and net income of $164 million marked an eighth consecutive quarter of GAAP profit ³.

The bill sat in credit. Provisions ran near $259 million ³, the allowance for credit losses, Affirm's reserve against souring loans, rose to 6.3% from 5.9%, and 30-day delinquencies climbed 35 basis points in the quarter to 2.9% ⁷.

Funding is the December exposure: the average cost of funds rose 27 basis points on higher benchmark rates↗, the outlook assumes short-term rates rise through fiscal 2027, and more than 70% of its funding is fixed-cost ⁷.

Chime is buying a bank to fund its credit cheaper

Chime, the banking app, ran credit at 29% of purchase volume in the third quarter, nearly twice its share a year earlier ⁴⁵. Interim finance chief Mark Troughton said its Instant Loans loss rate rose as first-time borrowers joined through the Prime tier↗ and could rise again this quarter, while repeat borrowers lose up to 50% less ⁴⁵.

Chime's hedge is a bank charter: the Stride Bank purchase, set to close in the first half of 2027, carries more than $100 million of annual after-tax synergies and, management says, lower funding costs ⁴.

Cash App's banking base stopped growing as Block builds its lending

Cash App, Block's▲+2.10% — Block, up 2.10 percent today payments app, counted 9.4 million primary banking actives in September, unchanged from June ⁵, even as Cash App gross profit rose 27% to $2.07 billion↗ and Block builds out lending infrastructure through its Cash App Score underwriting ⁶. The app reached 60 million monthly transacting actives in September ⁶; the paycheck base inside it did not grow.

The February reserve print is the first test

The bull case is filed too: Affirm's transformer-based underwriting model, kin to the engines behind large language models, lifted conversion 3.4% with credit losses flat ⁷, Chime's MyPay paycheck advances run at a 1.1% loss rate ⁴, and every published Affirm target sat above its post-print close ³.

The squeeze is timing: Affirm now lends to a wider pool of borrowers and Chime books first-time ones, just as the Fed prepares to raise the benchmark rates their funding costs track ²⁷. Affirm's February print shows whether the 6.3% allowance holds as the test loans roll off, and Chime gives 2027 guidance on its fourth-quarter call ³⁴. A one-day rate decision reprices loans that borrowers repay over years.