Ahead of the Fed, Young Bankers Wrestle With a Novel Notion: Rates That Rise

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As part of a mandatory training program for thousands of employees, U.S. Bancorp recently asked them: “What were you doing in the summer of 2006?”

For many of them, the answer was trading baseball cards and studying for exams—not trading bonds and studying the tables for variable mortgage rates.

When the Federal Reserve raises interest rates, possibly as soon as Thursday, it will mark the first upward move in almost a decade and the first move of any sort since 2008. In other words, it will be a foreign phenomenon for a large swath of Wall Street and the banking industry.

That lack of experience is worrying many veteran bankers, who fear that younger traders may not be prepared for potential gyrations in the bond market or even that retail employees won’t know how to pitch rate-based products to customers.

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