Investors, Don't Fear Higher Rates

Although interest rates will rise modestly in coming months, that should not derail the bull market.

(Image credit: g-stockstudio)

Barring a big shock to the financial markets, the Federal Reserve will raise short-term interest rates at its December meeting. That was Janet Yellen’s clear message in the press conference that followed the Fed’s decision to stand pat in September. All but three of the members of the Federal Open Market Committee—who vote on rate hikes—indicated that an increase is appropriate before year-end. Indeed, three of the 12 committee members dissented in favor of an immediate hike, pressuring Yellen to raise rates at the board’s year-end meeting, as it did in 2015.

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Jeremy J. Siegel
Contributing Columnist, Kiplinger's Personal Finance
Siegel is a professor at the University of Pennsylvania's Wharton School and the author of "Stocks For The Long Run" and "The Future For Investors."