The Risks of Rising Rates

By Kishore K. Yalamanchili

A featured article of our February 2021 edition of PRMIA's Intelligent Risk quarterly newsletter

The COVID-19 pandemic led to a major market dislocation in March 2020. While the S&P 500 dropped 33.9% from its peak in February to the trough in March, the 10-year yield fell to an intra-day low of 0.32%. Since then, rates have started to move higher with 10-year yield rising to 0.92%, and 2s-10s steepening to 80 bp (as of 12/31/20). This article examines the ramifications of rates normalizing in 2021 on some important sectors as the economy likely recovers with the availability of several vaccines for COVID-19 and possible additional fiscal stimulus.

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About the Intelligent Risk

Intelligent Risk is PRMIA's quarterly publication, bringing all PRMIA members free access to knowledge and information about risk management for financial institutions as well as current information on PRMIA chapters, committees, academic partners, news and events.
Individual articles from each edition are published under our members only Risk Library resources section. PRMIA is sharing select articles from the February 2021 edition with the public. Get more articles like this by joining PRMIA today.

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