Rate Hikes After Fed Pauses Don't Necessarily Derail Equity Markets
Dow Jones
Yesterday
1038 ET - Equity markets have historically been able to weather the transition to fiscal tightening after a prolonged pause in rate changes, LPL Financial's Adam Turnquist says in a note. In fact, outcomes have been especially favorable when the Federal Reserve cut rates before the pause, he says. In those instances, the S&P 500 delivered an average return of 7.8% in the 12 months after the first post-pause rate hike, compared with 0.8% for pauses preceded by a rate hike, Turnquist says. The Fed cut rates back in December before this latest round of holding rates steady, which is expected to end with a rate hike later today.
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