The Federal Reserve is planning on interest rates moving up to 3.5 percent at the end of 2022. Historically, Federal Reserve interest rate hikes have held stocks down, although the December 2015 to December 2018 series of rate hikes to 2.5% did not, perhaps because stocks had been held down for so long after the stock market bubble collapse in 2000. Corporate tax rates were dropped from 35 to 21 percent as part of the Tax Cuts and Jobs Act in December 2017 as well which may have boosted share prices despite Fed tightening.
Stocks were down as much as 24.5% in the first half of 2022, but have now retraced half of the sell-off. The jury is out on whether the additional planned Fed rate hikes in 2022 will keep stocks down for the year.
Stock market trend:
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