Are financial markets wrong to be so obsessed with rate changes?
 
Until late last year, no American or British investment professional in their 20s – and only very few in their early 30s – had experienced a rise in their domestic interest rate during their working lives. That all changed on December 16, 2015 as the US Federal Reserve finally increased rates and reversed a trend that had dominated financial markets for almost a decade.
 
And yet, although the rate hike was widely anticipated in magnitude and timing, markets, which had previously proven surprisingly resilient, saw a period of sharp declines and volatility in subsequent weeks. Given that market participants had not dealt with rising rates in these economies for this considerable amount of time, the level of investor uncertainty was perhaps unsurprising.

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