Rising rates have been good for bank stocks in the past. That time appears to be over—for now. If casual investors know anything about bank stocks, it may be that they are a market sector that can benefit from higher interest rates.
But this conventional wisdom rests on some assumptions. For one, that banks’ interest earned on assets like loans will go up faster than the costs of their liabilities like deposits. Also, that rising rates can be a good sign for the economy and a signal of rising loan demand or relatively low credit risk.