By: Joseph Hogue of Street Authority
Rising interest rates is one of the most oft-referred-to topics on Wall Street right now. Some see higher borrowing costs as the straw that could break the market's eight-year bull run while others see it as needed counter-weight to emerging inflationary pressures.
Members of the Federal Open Market Committee (FOMC) already expects three rate hikes this year, and we may see more monetary tightening than that if fiscal stimulus jump-starts the economy.
Bond investments and dividend-paying stocks have sold off on a 33% jump in the rate on the 10-year Treasury since the beginning of November. Existing bond prices drop when rates increase and investors fear that higher rates will draw others out of dividend stocks for the relatively safety in fixed-income. [Read more...]
Article source: http://www.streetauthority.com/node/30701272