Market outlook | The sharp sword of the Fed's interest rate hike is at its peak, what is the fate of US stocks in 2022? (Follow and comment to send 66 points)

There is only one day left in 2021, 2022 will come tomorrow.

FollowExpectations of the Fed's interest rate hike next year envelop the market. How will the financial markets perform in 2022?

Is it continuing to fluctuate? Or is there a steady recovery? Will there be significant risks?

In fact, no matter how popular the new energy, metaverse, and chip industries are, in 2022, a sharp sword called interest rate hikes hangs over their heads.

Today's financial academyTaking history as a guide, I decided to start with interest rate hikes and discuss market trends in 2022 with everyone. I believe investors can seize market opportunities more accurately after they have a deeper understanding of interest rate hikes.

1. What kind of monetary policy is interest rate hikes?

Interest rate hikes are the act of a country or region's central bank raising interest rates, thereby increasing commercial banks' borrowing costs from the central bank, which in turn forces market interest to increase as well.

The purposes of interest rate hikes usually includeCurb consumption, suppress inflation, encourage savings, and reduce market money supplyWait,Simply put, after interest rates are raised, the currency from the market will be taken away; this is a tight monetary policy.

Click on the blue link 🔗 Understand interest rate hikes and master monetary policy
Click on the blue link 🔗 Understand interest rate hikes and master monetary policy
Click on the blue link 🔗 Learn about interest rate hikes and master monetary policy

wherebyInvestors have always had an inherent perception that when the Federal Reserve raises interest rates, US stocks tend to perform poorly.Because when interest rates rise,People are more willing to save, reducing the demand for risky assets such as stocks to a certain extent.

However, in order to suppress inflation, the Federal Reserve also changed from pigeons to hawks, staging the strongest “hawkish transformation”, which not only accelerated the pace of reducing asset purchases, but also hinted to the market that interest rates might be raised three times in 2022, causing market panic to a certain extent.

But under the cover of interest rate hikes, is 2022 really cloudy? Through the data, we discovered that history tells a different story.

2. The fate of the market is even more different after the interest rate hike

Since the 80s of the last century, the US has experienced a total of 6 rounds of interest rate hikes. The duration of each round of interest rate hikes has remained for about 1-3 years, while the average number of cumulative interest rate hikes within one round of interest rate hikes has exceeded 10 times.

Moreover, during the interest rate hike, the performance of US stocks, US dollars, and US bonds varied.Nor is it what investors think; it will definitely cause the market to decline.

Click on the blue link 🔗 Performance of major asset classes in the US interest rate hike cycle You can understand the historical performance of US stocks, US bonds, and the US dollar during the interest rate hike cycle.
Click on the blue link 🔗 Performance of major asset classes in the US interest rate hike cycle You can understand the historical performance of US stocks, US bonds, and the US dollar during the interest rate hike cycle.
Click on the blue link 🔗 Performance of major asset classes in the US interest rate hike cycle You can understand the historical performance of US stocks, US bonds, and the US dollar during the interest rate hike cycle.

As for the upcoming rate hike in 2022, in fact, as DataTrek co-founder Nicholas Colas (Nicholas Colas) said in a report on Friday:

There are many reasons to be uneasy about US large-cap stocks, but the Fed's interest rate hike is not our biggest concern.

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