Interest rates are skyrocketing. The speed and rate of the recent move higher in 10-year U.S. Treasury yields is unprecedented. As you can see on the following chart, there has been nothing since at least 1963 that even comes close.

This could have a significant impact on both the economy and the stock market. And it won’t be good.

Higher interest rates are bad for companies because it makes them less profitable. Most companies pay their day-to-day expenses with short-term loans from banks. As rates move higher, these loans become more expensive.

These increased costs cut into a company’s profits. This could cause the price of their shares to fall.

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