Although the latest 50-basis-point interest rate hike marked a decline from the 75-basis point rate hikes for four consecutive times, the Federal Reserve expects the benchmark rates to peak at about 5.1% in 2023. With the central bank intending to keep raising interest rates through 2023, the stock market will likely remain under pressure.
James Demmert, the chief investment officer at Main Street Research, has urged investors to remain cautious as recessionary fears linger. He stated, “The Fed would like inflation to settle at 2%, and it’s hard to imagine that happening without a recession and much higher unemployment.”
