How to Profit Off Today's Rising Interest Rates
There are signs that the U.S. economy is recovering, so the market sees an end in sight to the Federal Reserve’s massive bond buying programs, called “ quantitative easing ,” or QE. The Fed’s QE programs were put in place after the Great Recession in order to help stimulate the economy. They have helped to keep interest rates low.Interest Rates, Bond Yields & Bond Prices
These relationships can seem a bit tricky, so I’ll use a diagram (you may want to save it, so it’s handy).
The relationships are:Rising inflation or the threat of rising inflation = rising interest rates, including bond yields. Rising interest rates/bond yields = falling bond prices.