J.​P. Morgan Asset Management recently published the piece, "Rising Rates: Managing liquidity through periods of rising interest rates," which tells us, "Rising rate environments can challenge even the most sophisticated fixed income investor. Considering the current market juncture and its potential impact on liquidity management and fixed income portfolios, we believe analyzing historical rising rate periods can provide a valuable perspective to investors. We make these key observations: (​1) When interest rates rise, the market value of previously issued fixed coupon bond holdings will fall as investor demand shifts to new, higher-​yielding bonds. But not all securities are created equal. (​2) Bonds with shorter maturities, floating interest rates and/​or higher yields should experience less dramatic price declines, and even potential price increases if demand for them outpaces supply available. (​3) During periods of rising interest rates and stable credit conditions, investors shortening duration could benefit from not only better overall total returns but also, and possibly equally importantly, reduced volatility in their portfolios. This paper examines the risks of -- and opportunities in -- rising rates. We explore prior rising rate periods, using indexes as proxies to illustrate how various fixed income strategies performed and outline strategies and solutions to better insulate a short-​term fixed income portfolio in a rising rate environment." Discussin "Analyzing recent interest rate cycles," the paper says, "Investors anticipating a reduction of monetary stimulus may benefit from a review of the four major periods of monetary tightening and rising interest rates that occurred over the last 30 years, as the direction of interest rates is a critical determinant of the performance of fixed income securities. As rates fall and rise in cycles, bond markets can turn from boom to bust, creating or hurting investment value in a sometimes unpredictable fashion. When interest rates fall, previously issued fixed-​coupon securities will typically increase in market value. When rates are rising, those same securities will decrease in value. All four rising rate periods saw both U.​S. Federal Reserve target rate (​fed funds) and U.​S. Treasury (​UST) yields increase. In periods 2 and 3, the markets were able to anticipate and price in the tightening of monetary policy before the fed funds target rate moved. This is evidenced in the rise of UST yields roughly nine and 12 months prior to monetary policy tightening in each respective period. The 1994 tightening caught markets off guard, as both the fed funds target rate and UST yields began to move higher at about the same time. And, in period 4, the low-​growth, low-​inflation environment led the U.​S. Federal Reserve (​the Fed) to start the cycle extremely slowly with only one hike per year in 2015 and 2016, muting initial yield changes on term Treasuries, before speeding up the pace in subsequent years, causing yields to rise further out on the yield curve."

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