Rising interest rates: Key points

Higher interest rates affect the value of all financial assets
Thursday 01 Dec 2016 Author: William Cain
Imagine you’re pumping up a balloon. The further you push down on the pump, the larger the balloon inflates. When you pull up on the pump, the balloon starts to shrink. The relationship between interest rates and financial assets is very similar. Falling interest rates and yields – pushing down on the pump – increases the prices of financial assets: the balloon. But markets are now fretting that the...

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