Investor optimism usually drops when rates start to rise, but John Wasik claims in his Reuters column that rising rates and stock prices can definitely herald a brighter economic fortune in the short term.
He writes:
If there is a takeaway from the relationship between stock and bond prices, it is that at a certain point investors cease to become optimistic about an improving economy, a crisis strikes or the stock market becomes irrationally exuberant. Although it is nearly impossible to predict when cycles end, holding a mix of stocks and bonds is still a rational move.
