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The Short Answer

How Do Rising Rates Impact Stock Returns?

Predicting the winners and losers of the next rate hike is a difficult undertaking.

Question: I know longer-duration bonds do worse when interest rates rise, but what happens to stocks when rates rise?

Answer: Investors who have a basic understanding of how bond duration works know that rising rates mean bond prices fall. Holding all else equal, investors could reasonably expect higher-quality, longer-duration bonds to sell off when the Fed hikes rates.