5 Companies to Buy Now That Higher Interest Rates Could Be Here to Stay
This year, rising inflation brought the actions of the Federal Reserve into full focus for investors. The Fed used its primary tool -- setting the prime interest rate -- to attempt to cool down inflationary pressures in the economy.
JPMorgan Chase (NYSE: JPM) President and Chief Operating Officer Daniel Pinto said the Fed doesn't want to allow inflation to become ingrained in the economy, and "putting inflation back in a box is very important." Pinto explained that after a decade of ultra-low interest rates, "real rates should be higher in the next 20 years than they were in the last 20 years."
Prolonged low interest rates weighed on many companies in the financial sector over the past decade. With rates near all-time lows for an extended period, companies like banks and life insurers saw profits get squeezed. That's because many companies generate some of their earnings from interest rates. If we enter an era of higher interest rates, stocks in the financial sector could end up being solid investments. Let's look at why this is and at five companies that will likely benefit, making their stocks potential investments today.
Source Fool.com
