Why energy stocks usually rise with interest rates

Energy stocks have generated the highest return of all 16 equity sectors during rising rate environments, which is a positive factor as the Federal Reserve raised rates in March and plans to increase them again this year.

“This bodes well for the energy sector in the coming months and years, as most analysts expect the trajectory of interest rates to rise,” says Robert Johnson, principal at the Fed Policy Investment Research Group in Charlottesville, Virginia.

While some experts predict that the central bank will raise interest rates twice, others have said it could be as many as three since a rate hike in June is a virtually a certainty…

 

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