Learn about investing in bonds in a rising interest rate environment. Interest rates and the prices of bonds have an inverse relationship, meaning when interest rates rise, bond prices will decline.There is no single profile of a rising rate environment, as small incremental increases over an extended period of time will more easily allow the markets to adjust, while larger increases over a shorter time period could prove more disruptive.
September 14, 2016—LIBOR is a benchmark rate that some of the world’s leading banks charge each other for short-term loans. LIBOR rates can be an indicator of stress in the financial system. Recently three-month LIBOR reached its highest level in more than seven years. Today, the elevation in LIBOR is being attributed to the pending U.S. Money Market Reform and not some impending banking crisis.