When Rising Interest Rates Signal Economic Strength—and When They Signal Risk

when-rising-interest-rates-signal-economic-strength—and-when-they-signal-risk

When Rising Interest Rates Signal Economic Strength—and When They Signal Risk

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Interest rates can rise for good, bad, or ugly reasons. Executives, who may have developed a point of view during the 2010s, a period of sustained low rates, need to distinguish among these forces

Global long-term interest rates have risen sharply, sparking fears of economic breaking points and debt crises. In early October, the U.S. 10-year rate reached 5.30%—over 400 basis points (bps) higher than it was in early 2020, and more than 100 bps higher than at the start of the year. In France, yields rose over 160 bps between March and October alone to 4.91%.

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