From Seekingalpha · Invesco US · · 40s
Fed Rate Hikes Boost Stock Market
Historical data shows stock market gains after Fed rate hikes, not cuts.
In brief
Historical data shows stock market gains after Fed rate hikes, not cuts. Historical data indicates stock markets often rise after Fed rate hikes compared to rate cuts. Originally reported by Seekingalpha.
Historical Stock Market Trend
Historically, the stock market performed better over the subsequent 1-, 2- and 3-year periods following rate hikes than it did following rate cuts.
Fed Rate Policy Context
The Fed generally raises interest rates when nominal economic growth is strong and cuts rates when economic conditions are deteriorating.
Investor Response Strategy
Rather than viewing every Fed hike as a warning to pull back, history suggests investors may want to consider a different response.
What matters most
Historical data indicates stock markets often rise after Fed rate hikes compared to rate cuts.
