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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