There is much rhetoric about higher interest rates being a headwind for equity markets. Heck we have even mentioned it multiple times. While we agree the immediate/short term reaction may be a headwind, longer term may be a much different story.
A Silver lining found?
Higher Interest Rates CAN be a good thing
From our friends at JPMorgan
If you are scratching your head a little about this chart, not to worry, we did too.
Rates currently reside in the lower green area, well BELOW the stagnation dot. According to JPMorgan’s analysis, raising rates would actually stimulate demand as rates are so low now they are having a stifling affect rather than stimulative.
Look for a much deeper dive into this in our coming Newsletter, and a soon to be released post (as promised earlier) on just how many times rates have been raised during an election year … We were very surprised, and bet you will be too !
Have a Great Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth