Presenter(s)

Andrew Charles Kohnen, Cannon Spelman

Comments

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

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Description

Financial economists believe that utility sector stocks are bond proxies i.e., as yields on bonds increase, utility sector stock prices will decline. In this study, I test the hypothesis that an inverse relationship also exists between rising Federal Funds Rates and utility stock movements. For my test, I use four periods of rising Federal Funds Rates since 1999. These periods have different macro characteristics, with two occurring after an economics recession, one during a period of modest inflation and slow but steady economic growth, and the most recent period, February 2022 - August 2023, where inflation is high and rising and the Federal Reserve is aggressively raising the Federal Funds Rate. I use the Top 20 stocks by market in the utility sector to carry out my analysis.

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

Is There an Inverse Relationship Between Utility Sector Stock Returns and Rising Interest Rates? An Empirical Analysis, 1999-2023.

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