Interest rate hike affect on stocks
The value of bond investments will therefore decline as rates rise. Once again, this hike is priced into the market to a large degree, so the effect will be a little muted, but even so it is The Bottom Line: As the Federal Reserve decides on an interest rate hike, investors are wondering what impact there could be on stocks. According to Gilani, we could see a small pullback in stocks The Federal Reserve raised interest rates in 2016 after a long period of an effective zero rate. The Fed also raised interest rates on March 15, 2017—and signalled that more rate hikes were on the way. What happened to stocks? They went up. All of this behavior suggests a strong relationship between interest rates and stock prices.