This chart looks at the correlation of equity market performance with interest rates, or more simply, how does equity performance move with changes in interest rates? This is important as interest rate levels are one of the favored tools used by central banks to try and control or influence what is happening in the economy. If investors have a view on the direction of interest rate movements, it helps to devise their view on equity allocation. When interest rates rise from low levels, it is usually a sign of economic strength and equities tend to also move higher. When they continue to rise from higher rates, it can be disruptive for economic growth and thus equity performance.