4 Cheap Bank Stocks to Buy Ahead of a Fed Rate Hike

Many financial companies will benefit once the Fed gets serious about lifting interest rates.

For bank stocks, the future is all about the Federal Reserve. Shares of banks have yo-yoed this year as investors have attempted to divine the Fed’s likely moves on interest rates. In February, when Fed chair Janet Yellen mentioned the words “negative interest rates” during congressional testimony, bank shares plunged to their lowest prices since 2013, even though Yellen was merely raising the subject as a possible tool for invigorating the economy rather than suggesting that the central bank might take rates into negative territory any time soon. On May 18, when the Fed released minutes of an earlier meeting that signaled an increased chance of a rate hike in June, bank shares popped almost 4%.

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Elizabeth Leary
Contributing Editor, Kiplinger's Personal Finance
Elizabeth Leary (née Ody) first joined Kiplinger in 2006 as a reporter, and has held various positions on staff and as a contributor in the years since. Her writing has also appeared in Barron's, BloombergBusinessweek, The Washington Post and other outlets.