What Happens to Stocks and Bonds When the Fed Raises Rates

Now that the economic data is picking up, investors will turn their attention to the what the Fed will do with short-term interest rates. People have been contemplating when the Fed will raise rates for some time, but improving employment numbers and GDP growth have really ramped up the speculation on that first rate hike.

Because interest rates play such an important role in the economy and the markets, investors are concerned with what will happen to stocks and bonds once the Fed finally makes its move to tighten monetary policy. This concern makes sense from a textbook standpoint — rising rates hurt bond performance and increase the cost of borrowing for corporations, among other things. ...Click here for full article!


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