Is This the End of Low Interest Rates?

The idea that we're in a "lower for longer" interest rate environment is being questioned by many financial professionals

External Writer 12 February, 2018 | 11:33AM

While the stock market is in the throes of volatility, it's easy to forget that equities have generally been moving in a straight line higher. Since the market hit its trough, the S&P 500 has climbed more than 280% as of this writing.

In January alone, it was up more than 5%. One big reason why stocks have done so well up until this point is that bond rates have been at historically low levels. The 10-year U.S. Treasury yield hit its lowest point ever, 1.36%, not even two years ago. It's hard for investors to make any money at those interest-rate levels, so, naturally, they turned to stocks.

Now though, the idea that we're still in a "lower for longer" rate environment is being questioned by many financial professionals. With the 10-year Treasury yield rising by about 18.75% year-to-date, it was at 2.85% at the time of writing, ultralow rates are now a thing of the past. But where do rates go from here? Do they get to levels where investors move money from stocks to bonds?

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