TREE NEWS reports: LPL Financial chief equity strategist Jeff Buchbinder reviewed six Federal Reserve tightening cycles since 1994 and found the S&P 500 typically struggles in the first months after an initial rate hike, though one-year returns are often better. After the Fed’s March 1997 hike, the index gained 42% over the following year, an outlier that lifts the historical average. The outcome hinges on whether the economy slips into recession.
Rate Hike Seen as Near-Certain, but Stock Market Outcome Still Open
AI take
The historical record offers little comfort for timing: early weakness after a first hike has been common, but twelve-month outcomes have varied widely, with the strongest episode skewing the average. That dispersion makes the recession question, not the hike itself, the real variable for risk assets. Whether the economy avoids a downturn is the open question that will determine if this cycle rhymes with the stronger precedent or the weaker ones.
Generated by AI for reference only.
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