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The company said it has had to rely on expensive sources of funding including borrowing from the Federal Home Loan Bank to supplement its cash flow due to an uncertain environment owed to the Federal Reserve’s fastest rate hike cycle in decades.
The majority of these borrowings could be repaid before the end of 2024, Charles Schwab said.
Fewer clients had moved funds away from their accounts with the company to other high-yield products in June so far compared with the previous month, a trend that could help reduce reliance on expensive funding sources, the Texas-based firm said.
