The Fed’s interest rate hikes last year have already weighed heavily on stocks, with the S&P 500 tanking about 20% as financial conditions tightened. Although favorable results at the beginning of 2023 charmed investors, the Federal Reserve’s continuing hawkish stance could affect the market rally.
Fed Chair Jerome Powell said recently that the stronger-than-expected booming job report and similar data in the near term could require an even sharper rise in rates than projected until the 2% inflation target is achieved. This could lead to a stock market collapse in the near future.
