Morningstar's Guide to Rising Rates

The Federal Reserve voted to raise rates this month, but investors have been laser-focused on monetary policy for years now, ever since the central bank launched its suite of unconventional measures during the financial crisis. Terms such as "Operation Twist" and "quantitative easing" entered the investor vernacular as individuals and professionals tried to grapple with what persistently low rates mean for their portfolios.

But what is going to happen now as the Fed begins to normalize its policy? So far, the Fed's policy has been unprecedented, so we don't have a blueprint of what the normalization will look like. Will higher rates put pressure on the bond and stock markets? Can the economy keep growing? How fast will the Fed choose to raise rates? What impact will U.S. policy have on other developed economies? What about emerging markets?

Morningstar analysts including Bob Johnson, Christine Benz, Eric Jacobson, Cara Esser, Karin Anderson, Patty Oey, and more shared their perspectives on what rising rates could mean for investors and their portfolios.

We'll be updating this page as new content is published; be sure to check back soon.

U.S. Economy Can Handle Higher Rates The Fed's plan to gradually raise rates in the coming years won't derail the economy and brings some certainty to the market, says Morningstar's Bob Johnson.

Fed Hike Shouldn't Cause Taper Tantrum 2.0 The prospect of higher rates is mostly baked into emerging-markets stocks and bonds, but that doesn't mean they're cheap or won't be volatile, say Morningstar's Patty Oey and Karin Anderson.

What the Market Is Telling Us About the Impact of a Potential Fed Rate Hike The market isn't as panicked as many investors have been.

Benz: Portfolio Do's and Don'ts in a Rising Rate Environment As rates tick up, investors should resist overemphasizing cash, stress-test their bond funds, and be mindful of other rate-sensitive assets.

How Different Types of Bond Funds Respond to Rate Hikes Keep an eye on the yield curve and look under the hood of your fund to size up the impact.

Fed Hike: A One-and-Done Affair? In the near term, the slow-raise policy signaled by the Fed would have minimal impact on corporate bonds.

How Does the Fed Raise Interest Rates? The mechanics will be different this time around.

Will Rising Rates Hobble Highly Rated Core Bond Funds? History and market expectations argue that fears of their impending doom are greatly exaggerated.

How Do Rising Rates Impact Stock Returns? Predicting the winners and losers of the next rate hike is a difficult undertaking.

How Will Bond Funds React to Rising Rates? A rundown of possible outcomes for certain Morningstar Categories when the Fed ultimately decides to hike interest rates.

What History Tells Us About the Impact of a Fed Rate Hike The short answer: It depends. The bond market doesn't respond the same way to every Federal Reserve decision to raise interest rates.