Weighing the Week Ahead: Will Higher Interest Rates Lead to Lower Stock Prices?

The economic calendar is light, and the market week will be shortened. There is no holiday this week, but expect many participants to take off early for a long weekend. If interest remain above 3% on the ten-year note, that will be the focus. Pundits will be asking:

Will higher interest rates lead to lower stock prices?

Last Week Recap

In my last edition of WTWA I suggested that the week lacked a dominant theme. That part was right. I took the occasion to discuss which stocks might benefit from Trump policy changes. While few pundits took up the topic, it was still a useful exercise for me, and I hope for my readers as well.

The Story in One Chart

I always start my personal review of the week by looking at a great chart. I especially like the version updated each week by Jill Mislinski. She includes a lot of valuable information in a single visual. The full post has even more charts and analysis, including commentary on volume. Check it out.

The market declined about 0.6% with a trading range of only 1.5%. This is the quietest week we have seen in a long time. I summarize actual and implied volatility each week in our Indicator Snapshot section below. As you can see, volatility has been moving lower, and is back into the long-term range.

Personal Note

Mrs. OldProf and I will be enjoying an extended holiday next weekend, so there will not be the regular WTWA installment. I’ll try to update indicators if possible. She is in withdrawal in the absence of football of any sort. She was watching some wedding on TV when I asked her for a comment.

Thanks to the Intelligent Economist for once again including me among the Top 100 Economics Blogs. Most readers know that my labor of love is fueled by the knowledge that people find the work useful.


From the Visual Capitalist, where you can also see prior years for comparison.

And, some updated information on debt from the NY Fed (HT GEI). The report also has information about various types of debt levels over time along with related credit scores.