Bank Stocks to Benefit From Rising Interest Rates

NEW YORK (TheStreet) — Bond yields are beginning to rise, which bodes well for earnings of several financials, KBW analysts said in a research note on Friday.

The yield on the 10-year treasury note has risen in the last couple of weeks to past 2.3%. Investors appear to be abandoning safe havens for more risky assets amid better domestic economic data and as expectations for additional monetary stimulus from the Fed declined.

Markets are also beginning to price in an earlier short-term interest rate hike by the Fed. On Friday, Federal Reserve Bank of Richmond Jeffrey Lacker said that the Fed may have to raise short term rates as soon as 2013 because economic conditions did not warrant keeping rates near zero for an extended period. The Fed has previously indicated that it would keep interest rates near zero until late 2014.

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