Presenter(s)

    Michael James Kondritz, Ronald Joseph Marciano

    Comments

    Presentation: 9:00-10:15, Kennedy Union Ballroom

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    Description

    Financial economists have long assumed that a rising interest rate environment is favorable to financial institutions because they can lend out at interest rates greater than their cost of capital. In turn, this should result in higher financial sector stock returns. To test this hypothesis I look at four different time periods between 1999 and 2023 where the key Fed Funds rate has risen. I use the top 20 stocks by market cap in the financial sector to evaluate the relationship between rising Fed Fund rates and sector stock returns. A secondary objective is to see how non-bank entities faired, return wise, compared to the banks during these rising interest rate periods.

    Publication Date

    4-17-2024

    Project Designation

    Independent Research

    Primary Advisor

    Robert D. Dean, Jon A. Fulkerson, Henry G. Willmore

    Primary Advisor's Department

    Economics and Finance

    Keywords

    Stander Symposium, School of Business Administration

    Institutional Learning Goals

    Scholarship

    Financial sector stock returns in a rising Interest Rate Environment: An Empirical Analysis 1999-2023

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