Shares of Upstart Holdings (UPST 0.78%) were sliding today on no company-specific news. Instead, investors were concerned about comments made by a Federal Reserve official about rising interest rates.
Investors are worried that ongoing interest rate hikes could spur a recession and the financial industry, which includes fintech companies like Upstart, is more sensitive to investors' concerns about an economic slowdown.
As a result, Upstart's share price was down by 3.8% as of 1:51 p.m. ET.
St. Louis Federal Reserve President James Bullard said today that the Fed's aggressive response to rising inflation has only had a minor effect so far.
"The change in the monetary policy stance appears to have had only limited effects on observed inflation, but market pricing suggests disinflation is expected in 2023," Bullard said in a speech today.
He also said that "the policy rate is not yet in a zone that may be considered sufficiently restrictive."
Investors saw those comments today and got worried once again that continued increases to the federal funds rate could eventually tip the U.S. into a recession.
Upstart reported its third-quarter results earlier this month, which missed analysts' estimates. Part of the company's problem right now is that rising rates are weighing down the company's loan business and investors are expecting that continued rate hikes could cause more pain.
With poor third-quarter results and Bullard indicating that the Fed isn't done tackling inflation with rate increases, Upstart investors are losing faith in the fintech stock right now.