In recent weeks, the U.S. economy has received a lot of good news. Third-quarter economic growth hit 5% on an annualized basis. In addition, inflation remains muted which is good news for the consumer, thanks largely to the huge drop in gas prices over the past six months. And, the labor market continues its steady recovery. The U.S. added 252,000 jobs last month, and the unemployment rate is now 5.6%. Jeffrey Sparshott at The Wall Street Journal wrote “The U.S. concluded its best year of job growth in 15 years.” And yet, the stock market has been increasingly volatile in this time. Stocks are now going decidedly lower on days in which good economic news is released. The reason for this is likely that as good news keeps coming, it increases the likelihood that the Federal Reserve will raise interest rates. This is seen as bad for stocks, because higher interest rates increase the cost of capital. The flip side to this debate is that more broadly, higher interest rates are a sign of an improving economy as a whole, and that is a good thing for corporate America in the long run.