NEW YORK (Reuters) – CME Group (CME.O), the world’s biggest futures exchange operator, on Wednesday said its quarterly profit fell as steps taken by the U.S. government to ease the economic impact of the coronavirus pandemic curbed hedging demand for some of its top products.

The Chicago Board of Trade-owner’s net income was $503.3 million, or $1.40 per diluted share, down from $513.8 million, or $1.43 per diluted share, a year earlier.

The COVID-19 pandemic has spurred volatility in equity markets, benefiting some exchange operators, like Nasdaq Inc (NDAQ.O), which last week reported better-than-expected earnings as stock and options trading volume soared.

But CME’s volumes were mostly down, after the U.S. Federal Reserve flooded the markets with liquidity in response to the pandemic and said interest rates would stay near zero for the foreseeable future, reducing the demand for hedging through futures on rates, commodities and currencies.

While interest rates have experienced “unprecedented low volatility” across the yield curve in response to the Fed’s actions, the longer-term outlook for interest rate futures is positive, said Sean Tully, a senior managing director at CME.

“Once the Federal Reserve reduces its intervention in the market and once the pandemic recedes, the needs for hedging, the needs for our products, are going to be much, much larger, I think, than ever before in history,” he said on a call with analysts.

Clearing and transaction fees, CME’s biggest revenue stream, fell 10.6% to $940.2 million from a year earlier as the company’s average daily volume tumbled 15.8% to 17.6 million contracts.

Revenue from CME’s market data and information services business rose 5% to $134.7 million.

Total revenue fell 7.1% from a year earlier to $1.18 billion.

Stripping out one-time items like acquisition costs, CME earned $1.63 per share, topping analysts expectations by a penny, according to IBES data from Refinitiv.

Reporting by John McCrank, editing by Louise Heavens and Alistair Bell

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