The United States Federal Reserve has raised interest rates by 25 basis points to a target range of 3.75% to 4.00%, its first hike since July 2023. It also signalled that another hike could come before the end of 2026¹. The decision comes against persistently elevated inflation, with higher energy prices adding to the pressure alongside resilient economic activity and investment. I have covered the effects of higher interest rates before, here and here. Picture generated by ChatGPT In general, higher rates can put pressure on interest-rate-sensitive assets such as bonds and real estate investment trusts (REITs), while also affecting selected equities through higher financing costs and valuations. Cash and short-term government securities, on the other hand, can benefit from higher yields. REITs Issues…Again This has got to be one of my nth posts on REITs. As a leveraged asset class, REITs tend to attract attention whenever interest rates rise. Higher borrowing costs can hurt, while higher bond yields can narrow the yield premium...