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re: Why are Utilities down this week?
Posted on 11/7/19 at 1:18 pm to UpstairsComputer
Posted on 11/7/19 at 1:18 pm to UpstairsComputer
Thanks. That makes sense to me - basically they are a yield vehicle that trades up and down with interest rates.
How should I think about interest rates "rising" today vs the fed reducing rates over the last few months?
How should I think about interest rates "rising" today vs the fed reducing rates over the last few months?
Posted on 11/7/19 at 6:39 pm to Negatiger1986
quote:The Fed’s focus is on overnight rates in the fed funds market.
How should I think about interest rates "rising" today vs the fed reducing rates over the last few months?
Utilities usually borrow longer term in order to match their long-term assets (plant, equipment and transmission lines) to longer term debt. Plus the only way utilities can improve their ROE to competitive levels is to leverage its balance sheet.
Longer term rates are what have gone up significantly over the last two weeks.
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