JUDGING by the stock market's reaction over the past eight trading sessions since Donald Trump won the US presidential election, higher interest rates are good for the economy and by extension, good for markets.

Just a few months ago though, the opposite held true - if economic data was strong and justified higher rates, stocks would weaken. "Bad news is good for stocks" was the market's main slogan. So what has brought about the sudden change in heart, even as US Federal Reserve chair Janet Yellen last week on Thursday all but confirmed a rate hike next month?

Maybe after eight years of zero rates, which by any stretch is unnaturally long, markets now view higher rates in tandem with the bounce in oil from US$30 a barrel a few months ago to around US$45 as a slow but better-late-than-never return to normalcy. Bubbles will slowly be deflated, money will finally flow into their best uses, asset prices will start to follow fundamentals instead of liquidity and for all you know, sub-par growth might actually pick up.