Sentences with phrase «large rise in interest rates»

Of particular relevance, under the current monetary regime it is not only possible for a large, general increase in the desire to save to be accompanied by rising interest rates, it is highly probable that when a large rise in interest rates happens it will be accompanied by a general desire to save more.

Not exact matches

This data shouldn't change the Fed's interest - rate strategy, as a rising labor force participation rate will put a lid on inflation regardless of how it's done, but it should lower our confidence that the Fed can solve the problem of a bifurcated workforce, in which a large chunk of workers are getting left behind, simply through interest rate policy.

This is because the province has accumulated a large public debt that given the prospects for an economic slowdown and / or rising interest rates will potentially increase fiscal pressure via debt service costs which in 2016 - 17 totaled $ 11.7 billion or just over 8 percent of total government spending.

The two largest funds in the segment — the $ 15 billion iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and the $ 9 billion SPDR Bloomberg Barclays High Yield Bond ETF (JNK)-- have faced sizable asset outflows as investors fret over high valuations and rising interest rates.

«With interest rates poised to rise over the next few years, a large allocation to bonds, especially now, may result in significant capital loss,» said Hardeep Walia, CEO of Motif Investing.

Even a modest rise in interest rates will send large flows of money to the banking sector.

For example, a 1 % rise in interest rates leads to larger losses when rates are at 3 % than you would see with rates at 6 %.

Other factors may have been a degree of illiquidity in the swap market in the face of large increases in private sector bond issuance and rising interest rates.

As usual, I don't place too much emphasis on this sort of forecast, but to the extent that I make any comments at all about the outlook for 2006, the bottom line is this: 1) we can't rule out modest potential for stock appreciation, which would require the maintenance or expansion of already high price / peak earnings multiples; 2) we also should recognize an uncomfortably large potential for market losses, particularly given that the current bull market has now outlived the median and average bull, yet at higher valuations than most bulls have achieved, a flat yield curve with rising interest rate pressures, an extended period of internal divergence as measured by breadth and other market action, and complacency at best and excessive bullishness at worst, as measured by various sentiment indicators; 3) there is a moderate but still not compelling risk of an oncoming recession, which would become more of a factor if we observe a substantial widening of credit spreads and weakness in the ISM Purchasing Managers Index in the months ahead, and; 4) there remains substantial potential for U.S. dollar weakness coupled with «unexpectedly» persistent inflation pressures, particularly if we do observe economic weakness.

It is interesting that you are skewing towards a larger bond portfolio in a rising interest rate environment which is not what most advisors would recommend.

The «canonical» market peak typically features rich valuations, rising interest rates, often a reasonably extended and «flattish» period where, despite marginal new highs, momentum has gradually faded while internal divergences have widened, and finally, an abrupt reversal in leadership, from a preponderance of new highs over new lows (both generally large in number) to a preponderance of new lows over new highs, with the reversal often occurring over a period of just a week or two.

The out - performance reflects the benefits flowing to the Latin American region not only from low US interest rates (these countries have large US dollar borrowings) but also its exposure to stronger growth outcomes in the US, with strong rises in the prices of key commodity exports boosting the price of local mining companies.

The long duration of bonds in this sector make it highly vulnerable to when interest rates begin to rise — the prices of these bonds will fall more quickly and by a larger amount when interest rates begin to rise.

It also currently holds a particularly large position in cash and short - term bonds, which undermines returns when interest rates are stable, but provides good protection when interest rates rise.

By keying in on large - cap sectors and stocks that have shown a strong tendency to move up or down with interest rates, investors can potentially outperform traditional U.S. large - cap equity indexes during periods of rising rates.

The largest underperformance was seen during the technology boom in the late 90s as interest rates rose by over 2 %.

He expects that small caps would be more negatively impacted than large caps by a more aggressive Fed, based on how they have performed in the past when real interest rates have risen.

(As an example, one can't estimate the withdrawal function on deferred annuities because haven't had a large sustained rise in interest rates since the product was created.)

According to The Four Pillars of Investing, investors should keep their bond terms short because long - term bonds offer little extra return for taking on a higher interest - rate risk and long - term bonds have a larger decrease in price in a rising interest rate environment.

Of growing concern, however, is that rapidly rising house prices in these two cities could encourage some households to take on larger mortgages than they can handle when interest rates rise,» added Mr. Guatieri.

This is what matters in a best - case scenario: What is your after - tax income, how large is it compared to your mortgage payment now, and what will that relationship be when mortgage interest rises by 2 percentage points (since most mortgages in Canada are adjustable - rate or variable - rate).

Despite a large pent - up demand from years of below - normal home sales, inventory constraints and tight credit conditions continue to impede the market, in combination with strongly rising home prices and higher mortgage interest rates.

One of these factors is the public REITs» cost of capital, which had risen earlier in 2016, improved midway through the year and then increased again in large measure as a result of actual or perceived changes in the interest rate environment.

However, as one of the largest purchases anyone will make in their lifetime, rising interest rates impact the ability people have to buy homes.

For example, if the interest rate on the 5/1 ARM rose from 2.625 percent to 8.625 percent, which is the largest increase the contract allows, the payment on a $ 300,000 loan would rise from $ 1,205 initially to $ 2,124 in month 85.

With low mortgage interest rates and rising home values and creative financing, many homebuyers splurged on upgrades and larger homes in the 2000s.