When rates rise there are two main offsetting effects on the value of bank’s loans. On one hand, rising rates usually mean an improvement of both the general economy and of a particular sector. Not only is demand improving, but some sectors, consumer products for example, are more sensitive to improving economic conditions. On the other hand, rising interest rates is also is a result of a rise in the price level of inputs such as labor, raw materials and rents. Taxes are another area that, depending on industry, can be positively correlated to a rise in interest rates.