We have viewed the Fed's zero interest rate policy (ZIRP) as deflationary as it is in essence a hidden tax burden on all citizens and institutions. Instead of paying interest on deposits, banks were able to keep that money as profit. We felt that the longer this policy persists, the longer the nation’s economic growth will be subpar and possibly worsen. Therefore, we view rising rates as a positive as they are coming off extremely low levels. While higher rates could provide a headwind for the stock market, as long as the economy is strong, the stock market will likely continue to grind higher. As you can see in the chart above, rates increased from 2004-2006 and that didn't affect the bull market in stocks.