Ignoring the Noise: The Long-Term Case for Materials | ETF Trends Key Takeaways: Part of this performance is due to what happened to interest rates. The Fed's decision to raise interest rates adversely affected the materials sector in particular, given that high rates slow down economic activity in areas like housing, manufacturing, and construction. Furthermore, storing and financing large quantities of materials becomes increasingly costly amid a higher rate regime. However, just because higher rates are ...